Vale will cut ore production by 10 percent
January 30, London. World prices for iron ore may rise significantly. The world's largest producer, Vale, announced the suspension of one of the key Brazilian mines, which produced 40 million tons of rock. This will reduce the corporation's total production by ten percent.
The move to capacity cuts was made to anticipate "tough safety issues" at mines in Brazil, according to company officials.
The reaction from commodity exchanges was immediate. On Wednesday, iron ore futures on the Dalian Stock Exchange rose 4.7 percent, and on the Singapore Exchange climbed 9.6 percent.
According to experts, the rise in prices for iron ore should provoke an increase in the cost of steel. They are confident that the state of the iron ore market should be closely monitored.
Vale's actions are caused by the disaster in the Brazilian city of Brumadinho. There, at the end of last week, a dam burst. It contained the toxic waste of an iron ore mine. This resulted in the death of sixty-five people. Hundreds of people are wanted.