Vale has received a preliminary license to expand the Serra Leste iron ore mine in Pará, Brazil.
The expansion will increase the South American miner’s production from the mine by 67pc from the current 6mn mt to 10mn mt annually.
Vale initially requested for the expansion license in 2016. The final installation license is expected within the next three months. The Serra Leste mine has an estimated iron ore reserve of 307.4mn mt with an average iron content of 65.4pc.
Vale foresees the extraction and processing of 107mn mt of iron ore in the Serra Leste Project in the next 11 years. The mine has a life expectancy of 30 years.
Pará’s Governor, Helder Barbalho, said the project will bring 1,300 new construction jobs and an additional 1,100 jobs when the project becomes operational.
Iron ore demand increasing
China buys about two-thirds of global seaborne iron ore, with most of the annual demand of more than 1bn mt sourced from Australia and Brazil, with South Africa a distant third. High quality iron ore demand has increased in China because of its environmental and operational efficiency benefits. The industry benchmark for ore is an iron content of 62pc.
China’s demand for iron ore pellets and high-quality ore is expected to accelerate in 2020. In fact, up to 20pc of the country’s ore demand could shift from lower to higher grade ores within the next few years, as it relocates mills to coastal regions, with stricter environmental requirements.
Environmental concerns are also driving the shift to electric arc furnaces worldwide along with demand for ore-based metallics such as HBI, DRI, and pig iron. Together, these initiatives will also increase the global demand for ferrous scrap.