Brazil's fourth largest iron ore producer has been hit by high freight rates between Brazil and China and low ore prices.

Cabo Verde Mineração, a small iron ore mining company based in the southern state of Minas Gerais, has reportedly suspended operations at the Katumbi mine located between the municipalities of Katumbi and Muzambinho.

Earlier, CSN Mineração, Itaminas and Usiminas Mineração also reduced production amid rising shipping rates.

The mine's production volume was estimated at 600,000 metric tons per year, mainly lump ore with an iron content of up to 64%.

Although Cabo Verde does not supply ore to China, the increase in shipping costs has also affected it: the company's domestic customers rely on local prices based on international market indicators. The sources said that higher tariffs for shipments between Brazil and China led to lower FOB prices in Brazil, making production unprofitable.

Since the company has no plans to resume mining iron ore, it will focus on a $460 million investment in a rare earth exploration project following the recent discovery of these minerals in the region.