SAO PAULO, (Reuters) – Heavy rainfall in southeastern Brazil has prompted miners including Vale SA to suspend some operations, they said on Monday, after downpours caused deadly floods in the northeast and threatened to delay harvests in the midwest.
Rainfall is expected to remain heavy this week in most of top mining state Minas Gerais, after runoff closed roads and railways.
The rains may also have contributed to the dramatic collapse of a canyon rock face in the state on Saturday, killing 10 people visiting a waterfall on boats.
In the northeastern state of Bahia, flooding displaced about 50,000 families and killed some two dozen over the holidays.
Vale said on Monday it has partially suspended operations at its Southeastern and Southern iron ore systems due to the bad weather, but reaffirmed its 2022 production target as the Northern system was not affected.
Samarco, a joint venture between Vale and BHP, also cut back operations in its Germano complex, producing at an estimated 50% of capacity until weather allows it to ramp up.
Brazilian steelmakers Usiminas and Companhia Siderurgica Nacional (CSN) also halted operations of their mining units.
Anglo American said its Minas-Rio system continued to operate as planned during the rainy season.
Over the weekend, France’s Vallourec paused its Pau Branco mine after heavy rainfall caused a dike to overflow.
“We see the news as potentially negative for the entire mining sector, as it could result in new regulations to suspend existing operations or delay new projects,” analysts at XP Investimentos said in a research note.
BTG Pactual analysts said economic impacts could be muted if normal operations are restored quickly, but noted it all depends on how long the heavy rainfall will last.
“We estimate there could be more than 100 million tonnes of annualized iron ore supply at risk at this stage in Brazil, which is a relevant number (roughly 7% of seaborne supply and about 30% of Brazilian supply), so clearly the stakes are high and we could see impacts on short-term iron ore movements,” they said.
