Samarco Mineracao S.A. will continue operating its iron ore pellet plant below capacity for at least another four months, the company said Tuesday.

Two of Samarco's three units, each with a capacity of 7 million metric tons a year, were mothballed at the end of November owing to falling demand.

Samarco's production capacity is 21.6 million tons a year, but the company only expects to produce 14 million tons in 2009.

All of Samarco's output is exported.

Samarco is jointly owned by Brazilian mining giant Vale S.A. (VALE) and its global competitor, Australia's BHP Billiton (BHP).

The plants are located at Porto Ubu in Espirito Santo state in southeastern Brazil.

-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086; John.Kolodziejski@dowjones.com