News: RIO UPDATE 1-Brazil's Vale gets operating license for S11D iron ore mine

(Adds detail on iron ore project, Vale statement)

BRASILIA/RIO DE JANEIRO, Dec 9 (Reuters) - Brazil's federal environment body Ibama approved on Friday the operating license for a giant iron ore mine being constructed by Vale SA VALE5.SA in the Amazonian state of Para known as S11D.

The license is valid for 10 years, a document published on Ibama's website said.

S11D is set to start operations by the end of the year, with the first shipment set for January 2017.

The mine will have a capacity of 90 million tonnes and reasserts Vale's position as the world's top iron ore producer, after years of stagnation in which Australia's Rio Tinto (RIO) effectively equaled its output.

It also lowers the company's production costs, vital in an era of lower iron ore prices.

Vale said it had been notified of the decision. The license is "an important milestone in consolidating Vale's position as the producer with the lowest C1 cash cost in the industry," Vale said in a statement, referring to a standardized cost of production that excludes freight and royalties.