Vale SA (ADR) (NYSE:VALE) is expected to register near record outputs from its mining activities despite suffering a major bump when the Samarco dam in Brazil burst in 2015.
The iron ore miner is expected to remain on top of its game thanks to the expansion efforts that it has been undertaking in the region. Vale is expected to report an output of 86 million metric tons for the second quarter. The anticipated output will also include that acquired from third parties. This year’s output is expected to be slightly smaller than the 89.3 million tons recorded in 2015. The production numbers for this year will not include the production from its joint venture with Samarco Mineracao SA.
The company had to put a stop to its mining activities in Southeastern Brazil in November after an upstream dam burst leading to the death of 19 individuals. The incident also polluted waterways in the surrounding area and caused damages to the tune of billions. Vale reported that the incident affected the performance of the Mariana mining hub which is located in the Southeastern part of the country. The mining firm stated that its output for the 2016 first quarter was reduced by 48% compared to the output in the first quarter of 2015.
The Brazilian government is currently considering a bill that might lead to a ban on upstream trailing dams. The latter is a damn design that was used in the Samarco dam which collapsed in October. There is a chance that the bill might be approved as soon as this year according to a report from an environmental officer from the Minas Gerais state.
Environmental regulation secretary Anderson Silva de Aguilar reported that Samarco is not expected to resume its mining operations this year and it might also miss the 2017 window. Samarco issued a statement saying that it has been going through all the licensing processes and has already handed over the documents required for it to be given the go-ahead to resume operations.
