Samarco to Invest More Than $1bn to Boost Iron Ore Production by 2028

SEATTLE (Scrap Monster):  Samarco Mineracao, a joint venture between Vale and BHP Group, has announced plans to invest more than $1bn (6.15bn reais) to restore its iron ore operations to full capacity by January 2028, Bloomberg has reported.

The investment plan was revealed by the company's top executives, including CEO Rodrigo Vilela, in an interview with Bloomberg News. The exact investment budget will be finalised next year.

The move comes after the company's operations were halted due to a catastrophic tailings dam disaster in November 2015.

Earlier in the year, Vale and BHP reached a $28bn settlement with the Brazilian Government over the dam collapse, marking a historic global agreement.

Since the tragedy, Samarco has spent approximately $260m to restart the facility in Mariana, Minas Gerais state.

As of Monday, the mining site has achieved 60% of its operational capacity.

Samarco's resumption of operations includes the reopening of a second concentration plant and the inauguration of a new tailings filtration plant.

By 2025, Samarco aims to produce 15mt of iron ore pellets, positioning itself among the top three global exporters of the steelmaking component.

This projection is a significant increase from the estimated 9mt expected this year, with exports targeting steel mills across various regions including Japan, Europe, the Middle East and the Americas.

The company is also advancing plans to decommission the Germano dam by 2026, three years ahead of the initial 2029 schedule.

The $580m closure plan aims to enhance safety by transitioning to filtered and dry-stacked tailings.

CFO Gustavo Selayzim commented on the financial health of the company, noting that despite a 20% drop in net revenue in the third quarter and a challenging market, there is no risk to Samarco's ability to meet the settlement obligations, highlighting a cash surplus of more than $2bn since operations recommenced.

Despite the market challenges, including a slowdown in the Chinese economy and reduced iron ore premiums, Samarco is focusing on efficiency and cost reduction to maintain its market share.

The company, currently under bankruptcy protection, is adapting to meet the product demands of steel mills while ensuring financial stability.

Last month, a Brazilian federal court cleared Vale, BHP Group and Samarco of criminal liability for the 2015 Fundão tailings dam collapse, which killed 19 people and caused extensive environmental damage.

"Samarco to invest more than $1bn to boost iron ore production by 2028" was originally created and published by Mining Technology, a GlobalData owned brand.

Courtesy: www.finance.yahoo.com