Bloomberg reported that Vale SA, Cia Siderurgica Nacional SA and MMX Mineracao e Metalicos SA operations in South Eastern Brazil may suffer output disruptions and transportation delays for a third year because of heavy rains.

Mr Marco Antonio dos Santos a meteorologist at Sao Paulo based Somar Meteorologia said the state of Minas Gerais will receive 300 millimeters of showers in the seven days through January 10. That equals the average for the entire month of January in the past 30 years.

According to Somar Minas Gerais declared a state of emergency in 71 cities recently after a cold weather front caused storms and floods that have killed at least eight people. The state’s capital, Belo Horizonte, last month received the heaviest rainfall for December in a century. Downpours in the January to March rainy season reduced output at Vale, CSN and MMX mines and disrupted ports and railways in the past two years.

Mr Pedro Galdi an equity strategist at brokerage SLW Corretora said “Rain can be a serious problem for mining in Brazil. It’s hard to operate with storms and water.”

(Sourced from Bloomberg)