Bloomberg reported that Vale SA, the world largest iron ore producer will lose about 20% of its January output of iron-ore in southern Brazil because of rains in three of the country states.

Mr Jose Carlos Martins company’s head of ferrous and strategy said “We are in Noah’s Ark; the rains have to stop for us to go down” to the mines. He said that more rains are forecast for next week.”

Mr Martin said Vale recently declared force majeure, a legal clause that allows companies to miss deliveries, on iron-ore shipments and said it will lose 2 million tonnes of the steel-making ingredient because of the rains in South Eastern Brazil where the company has 15 mines. The downpours are the largest since at least 1910.

He said that the impact on Vale quarterly earnings is likely to be insignificantly. The company cannot redirect shipments from other mines to its clients because it’s working at capacity limits.

He added that Vale main concern is for European clients, who are more dependent than Asian ones on the company iron-ore shipments. Asian clients are also protected by the fact that they are now receiving shipments sent 45 days ago.

(Sourced from Bloomberg)