High-grade iron ore prices are soaring
Another mining disaster in Brazil
Another deadly disaster at a Brazilian iron ore mine operated by Vale explains the scale of the divergence seen during the session, sparking concern about renewed supply disruptions for higher grade ore.
The benchmark iron ore price logged its largest gain in over a year and now sit at the highest level since early March 2017.
The sharp divergence across the grades followed news of a deadly dam collapse at an iron ore mine operated by Vale on Friday, sparking concern it could lead to supply disruptions for high-grade, low-aluminium ore.
According to Reuters, a dam holding mine waste at Vale’s Corrego do Feijao mine in Brazil collapsed on Friday, burying mining facilities and nearby homes in the town of Brumadinho, killing dozens and leaving the community in shock as hundreds remain missing.
“We’re worried that the mine accident might lead to higher premiums on low-aluminium iron ore,” an iron ore trader with Zheshang Development Group told Reuters.
Vale is the world’s top supplier of low-aluminium iron ore, preferred by Chinese mills for its low impurity level. The Corrego de Feijao facility accounts for 1.5% of Vale’s annual iron ore output.