Mineração Usiminas (Musa), the mining arm of the Brazilian steel producer Usiminas, has announced that it has suspended operations indefinitely at its Samambaia mine in Itatiaiuçu, Minas Gerais state, blaming rising freight costs caused by the ongoing war in the Middle East.
The Samambaia mine was responsible for 30 percent of the nine million metric tons (mt) per year capacity of Musa, while the Mina Oeste asset will maintain its mining and flotation activities, the company said.
The company said in a statement “The measure is part of a series of actions being adopted by the company to address adverse external conditions, specifically the drop in iron ore prices and the surge in maritime freight costs."
According to Musa, since the conflict in the Middle East began in late February, maritime freight rates on the Brazil-China route rose from $22.00–23/mt to peaks of $37.00–38/mt.
Analysts have recently reported that in the Tubarão-Qingdao route, the benchmark for Brazil-China iron ore transportation, the price has already reached $40/mt for October laycan.
The company did not disclose whether there would be layoffs, stating only that it is taking necessary measures "to align costs with the new operational reality."
