Vale Receives Permit to Expand World's Largest Iron Ore Mine

Brazil's Environmental Protection Agency (IBAMA) approves a license for Vale, the world's largest iron ore producer, to expand the Carajas iron ore mine in the northern state of Para.

The $ 20 billion plan calls for production to begin by 2016 and will reach its target of 90 million tonnes of iron ore per annum by 2018, according to a statement released by the company. The IBAMA regulator granted the company's request and issued a provisional license for expansion. The company plans to expand its Morro I, N4WS, Morro II and N5S projects in the Karajas complex. This process is likely to add 1.8 billion tonnes to the company's production capacity.

Karajas, a remote area in the Amazon rainforest, has the world's largest iron ore deposits of about 7.2 billion tonnes of proven and evidentiary reserves. This project represents 35 percent of Vale's annual production, which is approximately 300 million tonnes. The project is considered vital to Vale, as the miner is constantly losing market share compared to miners such as Rio Tinto and BHP.

To mitigate the environmental impact, Vale will transport iron ore from the mine to processing on a 37 km conveyor belt instead of using trucks. This will create the world's first transportation of this kind.

Last summer, Vale received permission from the Brazilian Environmental Protection Agency to build a rail system and expand a $ 19.5 billion complex near the Serra Sul mine, part of the Carajas complex.