Vale (VALE) has halted operations at two Brazil units that analysts say account for ~2% of the company’s iron ore production outlook for this year after water overflowed at the sites, Reuters reported Tuesday, citing a securities filing.
Vale (VALE) said the city of Congonhas had ordered the suspension of operating permits for its Fabrica and Viga units and the adoption of emergency measures following the overflows.
The company reaffirmed its FY 2026 iron ore production guidance of 335M-345M metric tons, but analysts said the suspension was a negative, as the units have an annual combined output of ~8M tons.
Analysts at Itau BBA said the events could affect Vale’s (VALE) short-term share performance, but this is due primarily to “regulatory scrutiny and headline risk rather than a reassessment of structural operational risk.”
Vale (VALE), which has faced scrutiny since two major dam disasters in Minas Gerais state in the 2010s, said there was no connection between the latest accident and the tailings dams it has in the region, which it said are “in stable and safe conditions.”