Vale Says Railway at Its Biggest Iron-Ore Mine Still Shut

Vale SA (VALE3), the world’s second-largest mining company, said the railroad that transports iron ore from its Carajas mine in Brazil was shut for a second day due to a protest by indigenous Amerindian people.

Demonstrators are blocking traffic at the Carajas railway in the northeastern state of Maranhao, a press official at the Rio de Janeiro-based company said today by telephone. The protests aren’t directly related to Vale’s activities, the company said in an e-mailed statement late yesterday. It will take legal action against those blocking the railroad, the company said.

The 892-kilometer (554-mile) railway connects Vale’s Carajas iron-ore mine, the world’s largest, with the Ponta da Madeira port in Maranhao. The company produced a record 109.8 million metric tons of iron ore in Carajas last year, or about 34 percent of its total output, Vale said Feb. 15.

The railway’s closing will have a “very limited” effect as long as operations are restored soon, Barclays Plc analysts, led by Leonardo Correa, said in a note to clients today.

“Vale holds inventory throughout its distribution chain, which would help offset any momentary disruption,” the analysts said. “We have seen this several times before.”

Vale also ships manganese, copper, and coal along the line, which uses the world’s largest train, made up of four locomotives and 330 cars, according to the company’s website. The railway transports about 350,000 metric tons of iron ore a day, Vale’s press official said today.

The shares dropped 1.3 percent to 34.69 reais at the close in Sao Paulo, their lowest since Sept. 6. The stock has lost 8.3 percent this year.

Iron ore for immediate delivery was unchanged at $104.20 a ton, according to a price index compiled by The Steel Index Ltd.

To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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