Mineração Usiminas (Musa), the mining arm of Brazilian steel producer Usiminas, announced that it is suspending operations at its Samambaia mine in Itatiayus, Minas Gerais, indefinitely due to rising transportation costs caused by the ongoing war in the Middle East.
The Samambaia mine provided 30 percent of Musa's output of nine million metric tons per year, while the Mina Oeste asset will retain its capacity. mining and flotation activities, the company said in a statement.
The company said in a statement that "This measure is part of a series of measures taken by the company to address adverse external conditions, in particular, falling iron ore prices and rising shipping costs."
According to Musa, since the conflict in the Middle East began in late February, tariffs for shipping on the Brazil-China route have increased from $22.00–23 per ton to highs of $37.00–38 per ton.
Analysts recently reported that on the Tubaran-Qingdao route, which is the benchmark for transporting iron ore from Brazil to China, the price for October delivery of iron ore has already reached $ 40 per ton..
The company did not disclose whether there would be layoffs, saying only that it was taking the necessary measures "to bring costs in line with the new operational reality."
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