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Vale in talks with officials for S11D iron ore mine expansion

15 Nov 2018 (Last Updated November 19th, 2018 13:59)

Vale is reportedly engaged in discussions with the Brazilian authorities in relation to a proposed expansion of the $14bn S11D iron ore project, located in the Amazon rainforest.

Vale in talks with officials for S11D iron ore mine expansion
Aerial view of the plant and the stocking yard. Credit: Ricardo Teles.

Vale is reportedly engaged in discussions with the Brazilian authorities in relation to a proposed expansion of the $14bn S11D iron ore project, located in the Amazon rainforest.

At a discussion with regulators, Vale talked about the possibility of expanding ore-processing infrastructure and the railway that is used to transport iron ore to port, Bloomberg reported citing Brazil federal environmental agency Ibama.

The multinational miner is pursuing the expansion to cater to growing Chinese demand for the low-cost, high-grade ore from the mine.

In September this year, Reuters reported that Vale is considering the project expansion, citing a statement from the company’s executive director Peter Poppinga at an industry conference in China.

With a capacity of 90 million tonnes, S11D is said to be the world’s largest open-pit mine producing iron ore, a key ingredient used in the manufacturing of steel.

The project is expected to reach capacity by 2020.

The Chinese government is imposing stringent environmental restrictions on domestic mineral production, which is forcing steel manufacturers in the country to focus on improving efficiency and lowering emissions.

It is in this backdrop that Vale is looking to strengthen its position as a leading producer of high-quality ore.

“Vale talked about the possibility of expanding ore-processing infrastructure and the railway that is used to transport iron ore.”

Initially, the company planned to reach and maintain production at the mine’s peak capacity, but has reconsidered its stance to meet Chinese demand for S11D’s ore.

Vale has not yet submitted a formal request to the regulators to approve the expansion plan.

The S11D mine, which is located in Canaã dos Carajás in the state of Para, was inaugurated in December 2016. The project produced around 22 million tonnes in its first year.