Brazil's Samarco To Restart Second Pellet Unit By July
June 18 2009 - 9:24AM
Dow Jones News
Brazil's Samarco Mineracao S.A. is to restart production at a
second pellet unit by the end of June, the company told Dow Jones
Newswires in an interview Thursday.
"We're working with a more positive scenario in the second half
of the year," said Luiz Ricardo Cunha Melo, Samarco's general
manager for sales and logistics.
Samarco is jointly owned by Brazilian mining giant Vale S.A.
(VALE) and its global competitor, Australia's BHP Billiton Ltd.
(BHP).
Samarco has been operating just one of its three pellet units
since November, its most modern facility, with 7.6 million metric
tons a year capacity.
According to Melo, this unit has been working at full
capacity.
The other two units each have 7 million ton capacity.
Despite the signing of three contracts in the past week at the
new annual reference price, and the second unit restart news, Melo
maintained Samarco's forecast of 14 million ton pellet sales in
2009.
The three contracts were signed with Indonesia's Krakatau,
Malaysia's Lion Group and Trinidad and Tobago's Nu-Iron.
The new price is approximately $84 per metric ton, 48.3% lower
than the 2008 price, Samarco said.
Samarco's Ubu plant in Espirito Santo State, southeastern
Brazil, has 21.6 million tons total capacity.
Melo said Samarco exports all its production and has between 10
and 15 clients each with demand over one million tons a year.
However, he pointed out that owing to the global crisis and
accumulated stocks, some clients would not necessarily take their
full amounts this year and may transfer the remainder to next
year.
Melo said he believed the signing of the new reference price
contracts would lead to more deals "in the next few days and
weeks."
-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086;
John.Kolodziejski@dowjones.com