MAC: Mines and Communities

Vale wins environmental permit for Brazil rail expansion

Published by MAC on 2012-11-25
Source: Reuters, Mining.com (2012-11-19)

Vale wins environmental permit for Brazil rail expansion

Approval from government agency Ibama will allow Vale to extend the Carajas railway by 786 km and raise capacity to 230 million tonnes of iron ore per year.

Reuters

19 November 2012

SAO PAULO - Brazil's environmental regulator gave the world's No. 2 mining company Vale a green light on Monday to expand the Carajas railroad, a key part of its plans to increase iron ore output in the Amazon.

Approval from government agency Ibama will allow Vale to extend the Carajas railway by 786 kilometers (499 miles) and raise capacity to 230 million tonnes of iron ore per year from 130 million metric tonnes, the company said in a statement.

The railway, known as EFC, carries nearly 10 percent of the world's sea-borne iron ore exports, or about 1 billion tonnes a year, from the Amazon mine complex at Carajas to the Port of Ponta da Madeira in the state of Maranhão, Brazil.

Work on the railway expansion, a $4.1 billion project, should be completed in 2017, supporting Vale's $8.04 billion expansion of the Carajas complex. The expansion, known as S11D, is expected to begin operations in 2016.

After reporting weak third-quarter earnings, Vale said it is selling underperforming assets and halting work on a mine in the West African nation of Guinea. It is instead focusing investments on expanding production at Carajas.

Rio de Janeiro-based Vale, the world's largest producer of iron ore, will increase production by about 100 million metric tonnes a year, or 10 percent of current world iron ore exports, with the S11D project.

Expansion efforts in the state of Pará, home to the Carajas mine, have occasionally been affected by protests from Brazilian indigenous groups.

(Reporting by Leila Coimbra and Caroline Stauffer; Editing by Chizu Nomiyama)


Vale gets green light for railway expansion

Cecilia Jamasmie

Mining.com

19 November 2012

Vale gets the green light for iron ore related railway expansion

On Monday Brazil's Vale, the world's number one iron ore producer, was granted an environmental permit to expand the Carajás railroad (EFC), a key part of its plans to increase iron ore production in the Amazon.

The South American country's environmental regulator will let Vale extend the Carajás railway by 786 km and increase capacity to 230 million tons of iron ore a year, up from 130million tons, the company said.

EFC carries nearly 10% of the world's sea-borne iron-ore exports, or about one-billion tons a year, from the mine complex at Carajás to the Port of Ponta da Madeira in the Brazilian state of Maranhão.

Vale added that the more than 90 environmental licenses it has obtained this year are allowing Vale "a step change" in the quality and quantity of its future iron ore production at operational costs below current levels.

The miner was granted a preliminary environmental license for the new mine in June, but has run into problems with the project.

In June the company won a court order that overturned an earlier decision forcing work to be suspended because of environmental concerns. Last month, Brazilian indigenous groups protesting the expansion of Carajás blocked transport for three days.

The "S11D", as the new pit in the Carajás complex is known, is a truly gargantuan project that will see the Brazilian giant commit almost $20 billion over the next few years.

The Carajás complex is the largest iron ore deposit in the world with 7.2 billion tonnes in proven and provable reserves - that's a more than $700 billion contribution to the Brazilian economy at today's prices.

S11D would not only lower Vale's overall costs at the operation, but also improve the average quality of the ore it mines.

Vale plans to spend $8 billion to develop the mine and build a new processing plant, as well as $11.4 billion to expand the railroad and local port to allow it to ship the steel-making ingredient to important markets in Asia using its massive Valemax carriers (400,000 deadweight tonnes).

To ameliorate the planned works' environmental impact, Vale said it would transport iron ore from the mine to the processing plant via 37km of conveyor belts instead of using trucks. At the moment the mine mills 300,000 tonnes per day.

The Rio de Janeiro-based company added S11D would produce 90 million metric tonnes of iron ore - adding some 30% to Vale's current output - and begin operations in 2016.

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