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Brazilian iron ore miner Samarco restart not till end-2018: report

https://www.chemnet.com   Jul 25,2017 Platts
Brazilian iron ore pellet producer Samarco's return to operations has been delayed until late 2018, after the company confirmed approval and reconstruction processes at the mine complex would not be completed this year, newswire Agencia Estadao reported Monday.

Samarco did not provide a specific date for resumption, and at best, operations may only return at the end of 2018, the report said.

A Samarco spokeswoman told S&P Global Platts by phone Monday that the company could not provide a restart date due to the ongoing licensing process.

Once Samarco is granted an environmental licence, the company would need five to six months for necessary works at a tailings dam at the complex in Minas Gerais, leaving a restart some way off, the Agencia Estadao report said.

Samarco confirmed the timescale of the necessary works following the environmental licence, and the corrective operational licence also needed.

Furthermore, operations will not start at full capacity, the report said, citing the company.

Samarco shareholder BHP Billiton said in June that the 30.5 million mt/year pellet joint venture with Vale would likely miss an earlier target for resumption in the second half of 2017.

Platts Atlantic monthly blast furnace pellet premium assessment averaged $31.45/dry mt in 2016, and in the first half of 2017 averaged $45/dmt, with July at $44/dmt.

A Europe-based market source said there had been no word from Samarco, and cautioned against speculating on a restart date given the complexity of the process and the fact that a restart requires approval from various authorities.

Samarco's pellet operation relies on iron ore concentration plants feeding material via a slurry pipeline to coastal pellet plants in Ponta Ubu in Espirito Santo state.

Samarco's entire operation, including its mines, was idled after an accident at the end of 2015 let waste water with iron ore tailings from the mining and processing operation in Minas Gerais flood the Rio Doce river.

Since the accident, changes in ore processing legislation, shifting it to dry basis from wet, could complicate mining and technical processing, affecting pellets.
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