From the websites of the two global mining giants, Vale and BHP Billiton, we learned that due to the sharp drop in international demand for pelletized ore caused by the financial crisis, Samarco, a company in which both hold 50% stakes, has decided to shut down two of its three pelletized ore plants at the end of this month, reducing pelletized ore production by two-thirds.
In a statement released on the 22nd, BHP Billiton stated that due to weakened market demand, Samarco, which owns three pelletized ore plants, will suspend operations of two of them at the end of November, with a reassessment for potential resumption scheduled for mid-January next year. The third plant, established in April this year, with an annual production capacity of 7.6 million tons, will continue to operate. It is understood that Samarco's total annual production capacity is 21.6 million tons, making it one of the largest pelletized ore suppliers in the world. This reduction in production means that Samarco will reduce its pelletized ore output by two-thirds.
Coincidentally, earlier, Brazilian Vale had issued a statement deciding to reduce its iron ore production by 30 million tons per year starting from November 1st, equivalent to 10% of last year's total production. On November 10th, Rio Tinto, the Australian iron ore supplier, also announced a reduction of about 10% in its iron ore production.