My comments in italics, to this reasonable article from the AFR

Brazil warns 'we'll be back' with iron ore expansion threat

From the article below:
After further questioning on Friday, Vale confirmed its resumption planwas to achieve export "rates" of 400 million tonnes some time in2022, not necessarily export 400 million tonnes in that year.

This is how it is with Vale- what they say is not necessarily what they mean.

Australia'sbiggest iron ore rival in Brazil says it will supply large volumes of new supply long before Rio Tinto and Chinesecompanies can unlock a big new province in Africa.

As Australian miners and investors enjoy bumper profits anddividends from high iron ore prices, Brazilian miner Vale revealed on Friday that its board would soon consider an expansion of its biggest and best mine amid "amazing" Chinese demand for the commodity.

This I have mentioned in previous posts, at the height of the pandemic, Vale is talking about expanding Serra Sul, near Canaados Carajas. They are ignoring the risks.

Additional supply of iron ore threatens to flatten buoyant prices for the commodity.

Expansion of Vale's flagship S11D mine would come on top of the company's ambitious plan to restore within two years the 100 million tonnes of iron ore capacity that was lost over the past 18 months to catastrophic dam collapses and coronavirus disruptions.

They have not been able to do this yet

Additional supply of iron ore threatens to flatten buoyant prices for the commodity, which have provided the Australian government with better than expected revenues when the pandemic has savaged company tax inflows from other sectors.

As if slighted by the iron ore industry's recentfocus on the threat posed by Guinea's nascent Simandou iron ore province, Vale said on Friday it planned to restore its shuttered capacity by 2022.

''Vale isthe only company that can bring back almost 100 million tonnes in the next twoyears,'' Vale's iron ore boss, Marcello Spinelli, said in response to aquestion about Simandou's potential.

"We'll be back.''

Thanks Arni. Again, let’s see if they can even reach their 2020 targetof 310 MT

For context, Australian miners collectively exported about 852 million tonnes of iron ore in the year to June30.

The expansion at S11D is expectedto initially be 10 million tonnes of extra annual capacity, but Vale is understood to be studying ways to bring on a further 20 million tonnes of newcapacity.

Cases in Canna dos Carajas have not been suppressed. This is a bad idea.

''We are developing another possibility ... another 20 [million tonnes],'' Mr Spinelli said.

''We're going to submit this assoon as possible to our board.''

Like Simandou, S11D typicallyproduces ore with higher iron grades than that produced in Western Australia by Rio, BHP, Fortescue Metals, Roy Hill and Mineral Resources.

But Vale's tough talk will betaken with a grain of salt by Australian miners, given Vale's reputation forbeing optimistic about its ability to resume mining in areas where its faileddams killed hundreds of people.

Correct

Vale cannot resume the productionwithout the support of Brazilian regulators, who have been slower to approverestarts than Vale initially expected.

Significant work is also requiredby Vale to introduce "dry'' wastedisposal systems that are less likely to collapse than the company's traditional ''wet'' tailings.

Hundredsdied after the catastrophic failure of Vale's Brumadinho tailings dam in Brazilin January 2019. Steve Yolen

Vale has already been slower toresume shuttered production than was expected under the three yearrecovery plan it unveiled in May 2019.

And will remain slow.

After further questioning onFriday, Vale confirmed its resumption plan was to achieve export"rates" of 400 million tonnes some time in 2022, not necessarilyexport 400 million tonnes in that year.

Typical

Vale has always planned toproduce more iron ore in the second half of 2020 than its extremely weak first half, and said that alone would weigh on iron ore prices in coming months.

''The price is high, we don’t seea support for the price and the short-to-mid term, actually. Remember that weare now bringing more than 50 million tonnes to the market [compared with thepast six months],'' said Mr Spinelli.

Really?Has the pandemic suddenly disappeared in Brazil?

Simandou has been on thebackburner for much of the past decade because of ebola virus outbreaks in Guinea,allegations of political corruption and, most significantly, the high cost ofbuilding transport infrastructure for a mine that would be 650 kilometres fromGuinea's coast.

Ebola in Guinea? A 650 kms railway through the forest?

In 2011 Rio was planning to spendmore than $US10 billion on development of Simandou to create a mine withinitial capacity of 95 million tonnes that would be in production by 2015.

But interest in the iron-richmountain range was revived last year when a Chinese consortium, SMBWinning, secured two iron ore tenements adjacent to those held by Rio and its partners.

SMB Winning has flagged an 80million tonne per year project costing about $US14 billion ($19.4 billion).

Fortescue does not expectto face competition from Simandou iron ore within the next five years, while Rio chief Jean-Sebastien Jacques said it could make sense for Rio's Simandou tenements to be combined with those of SMB Winning.

Correct analysis by FMG

https://www.copyright link/companies/mining/brazil-warns-we-ll-be-back-with-iron-ore-expansion-threat-20200731-p55h9j