Vale the largest producer of iron ore in the world had said that it will lose 2 million metric tons of iron ore due to the heavy rains that are plaguing three states of Brazil. The mining giant has declared force majeure on iron ore shipments.
Force majeure is a legal cause that allows companies to miss deliveries. In case of the Rio de Janeiro based mining giant the legal clause will be coming into effect on a series of iron ore contracts that it has in place.
The company statement said that heavy rains since mid December of 2011 in the states of Minas Gerais, Rio de Janeiro and Espirito Santo have created difficulties for their operations in the South and Southeast systems. It continued to say that they were contacting customers, in accordance with the terms of respective contracts.
On the other hand the Brazilian miner has not sold its first mega iron ore cargo delivered by Berge Everest. It has instead stored the material in an area near the port. The 388,000 deadweight tonne vessel carried 350,000 tonnes of iron ore, which it unloaded at China's Dalian port. Analysts say that Vale is probably waiting for the demand from the Chinese mills to pick up before it considers selling it.