Vale shares jump on iron prices despite losing certifications
BRASILIA: Brazilian miner Vale SA said it failed to obtain stability certificates for 13 dams under review following the rupture of another dam in January that killed hundreds, although its shares rose on strong global iron ore prices.
The world’s largest iron ore miner also disclosed in a securities filing on Monday that a court had frozen an additional 1 billion reais ( US$ 258.42 million) in assets over potential damages related to the evacuation of its Vargem Grande dam.
Despite the disclosures, Vale shares jumped to their highest point since the Jan 25 disaster, rising 3.6 per cent to 52.79 reais.
The shares pared gains to close 3.3 per cent higher at 52.60 reais on Monday.
Iron ore futures contracts for May delivery rose as much as 5.2 per cent on Dalian Commodity Exchange to hit a seven-week high on Monday, on strong economic data from China and supply concerns after Rio Tinto cut its 2019 forecast for iron ore shipments.
Prices have also been buoyed by production cuts at Vale, which said last week it expects to sell 75 million tonnes less than planned this year following the dam burst and heightened security concerns over its tailing ponds.
Brazil’s iron ore exports fell 25.9 per cent in March over the same month in 2018 to 22.18 million tonnes, the lowest monthly volume in six years due to the drop in Vale output.
Vale said neither the lack of certificates nor the asset freeze would affect its iron ore and pellet sales forecast announced last week. — Reuters