Brazilian mining company Samarco has announced a $1 billion investment plan to increase its iron ore operations back to full capacity by 2028. The move is aimed at restoring the company's production capacity following the deadly barrage accident in 2015.
Samarco, a joint initiative between Vale and BHP Group, halted operations in 2015 following the fall of the Germano Barrage. The accident killed 19 people and contaminated waterways in Minas Gerais and Espírito Santo. The accident created a crisis of confidence in the mining industry and left Samarco facing years of legal and financial problems.
260 million dollars spent
In the post-2015 reorganization, Samarco gradually restarted its operations in 2020 and has spent $260 million on this transformation to date. The company is now at 60% of its production capacity and aims to increase its capacity by commissioning a second pelletizing plant and a new tailings filtration plant.
Samarco plans to produce 15 million tons of iron ore pellets by 2025. This target will reposition the company among the top three players in the global market. Samarco, which aims to supply steel factories in Japan, Europe, the Middle East and the Americas, will close the Germano Barrage in 2026, three years ahead of the planned date. The barrage closing represents a transition to a safer system in which tailings will be managed by dry stacking.
Gustavo Selayzim, the company's Director of Financial Management, said that Samarco has so far generated a cash surplus of more than $2 billion after restarting operations. This financial stability allows the company to realize its restructuring objectives.
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