IM ISSUE 4 18/11/05 6:46 Page 24

Operation focus

CVRD’s iron fist

The world’s biggest producer has big plans, examined by John Chadwick

C
iron ore and pellets were shipped, beating Espírito Santo, and the Port of Sepetiba,

C
ia Vale do Rio Doce (CVRD) is the previous record of 62.386 Mt. Gross in the State of Rio de Janeiro. The capacity
a global diversified metals and revenues of $3.61 billion were 57.8% of these mines is 90 Mt/y of iron ore.
mining company, the largest higher than in 2004. With reserves of 1,500 Mt and resources
in the Americas. CVRD groups its iron ore operations of 15,500 Mt of high-grade hematite, the
Headquartered in the city of into two ‘Systems’. The Southern System Carajás orebodies, in the State of Pará, are
Rio de Janeiro, it is the largest logistics produces lump ore, direct reduction the heart of the Northern System. Ore is
operator in Brazil. It is also a world-class lump, standard sinter feed, pellet feed, carried by the Carajás railroad to the
producer of manganese, ferro-alloys, Tubarão direct reduction pellets and Ponta da Madeira Maritime Terminal, in
copper concentrate, bauxite, potash, Tubarão blast furnace pellets. Products of the State of Maranhão.
kaolin, alumina and aluminium. It is also the Northern System are Carajás lump With a total annual capacity of 36 Mt,
growing into nickel. However, above all, and Carajás fines, Carajás pellet feed, CVRD’s pelletizing complexes in Tubarão,
CVRD is the world’s number one producer Carajás direct reduction pellets and São Luis and Minas Gerais consist of nine
and exporter of iron ore and pellets. Iron Carajás blast furnace pellets. plants.
ore and other ferrous metals account for With reserves of 3,000 Mt and The CVRD iron ore mines are Alegria,
about 80% of CVRD’s revenue. resources of 39,000 Mt, the mines of the Alegria/Germano, Brucutu, Capanema,
Records are currently tumbling. In the Southern System are located in Minas Carajás, Caue, Conceicao, Fabrica/
first nine months of 2005 production Gerais. Ore is carried from these mines by Segredo, Fazendao, Feijao, Gongo Soco,
totalled 187.44 Mt of iron ore, a new the Vitória-Minas railroad that runs 905 km Morro Agudo/Agua Limpa and
record. In the third quarter, 65.26 Mt of to the Port of Tubarão, in the State of Timbopeba. Just one of those mines,

8 International Mining December 2005

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Operation focus Main CVRD ferrous metals projects currently in progress

Project Budgeted 2005 Status

Carajás, will expand to 100 Mt/y in 2007. ($ million)
The company aims to increase annual iron Expansion of the Carajás 140 For completion in 2006, this will add 15 Mt
ore output to 300 Mt by the end of 2007. iron ore mines by 85 Mt/y to CVRD’s annual capacity. The second
CVRD reported $1.39 billion in capital ship loading system of Pier III in test phase.
spending in the first half of 2005 and
earmarked almost $1.94 billion more in Brucutu iron ore mine – 205 Phase I should be completed in 2006,
the second half, mostly for new projects Southern System raising nominal capacity to 15 Mt/y. Phase II
but not all in iron ore. is to be completed in 2007, to bring production
In 2004, CVRD generated an all-time capacity to 24 Mt/y. A further expansion,
revenue high of $8.5 billion, an increase to 30 Mt/y is currently under study.
of 53% over 2003. The final 2005 is sure
to be higher still, much thanks to iron Itabira iron ore mines – 16 Modernization and expansion, raising
ore. During 2004, the company signed Southern System capacity to 46 mt/y, for completion and
contracts for the supply of 750 Mt of iron startup in 2006.
ore and pellets with 40 clients in the
Americas, Asia and Europe. In fact, iron Fazendão iron ore mine – 52 Project to produce 14 Mt/y (ROM) iron
ore demand was so high that CVRD had Southern System ore. Works began in second half 2005,
to expand its general cargo business four for completion and operational startup
times above Brazil’s GDP growth rate. in 2007.
In August this year, CVRD concluded its
first iron ore shipment to Ukraine. Ukraine Fábrica iron ore mine – 38 Project to expand capacity by 5 Mt,
is the world’s 7th largest steel producer from Southern System 12 to 17 Mt/y.
and CVRD stated: “This shipment represents Startup scheduled for 2007.
the conquest of a new frontier of the iron
ore seaborne market.” Timbopeba iron ore mine 25 Extension of mine life to 2008, with an
For 2005, CVRD approved capital – Southern System estimated capacity of 2.7 Mt/y. Some
expenditure of $3.332 billion. Of the $7.8 million will be invested in development,
total, 22.1% – $736 million – was allocated purchase of small-scale equipment and new
to ‘stay-in-business capex’, to sustain access for crushing facilities; a further
existing operations, and 77.9% – $2.596 $17.6 million will go on rolling stock for
billion – to growth capex, made up of EFVM railroad.
$2.221 billion to be invested in projects Tubarão Port expansion 22 Expansion of the conveyor and dockside
and $375 million in research and development. – Southern System machinery, and construction of new
This compares with 2004 capital expenditure dockside storage facilities.
of $1.956 billion.
One of the important projects concluded Expansion of São 18 Expansion of capacity from 6 to 7 Mt/y.
in 2004 was the expansion of iron ore Luis pelletizing plant The expansion will be completed by
production capacity at Carajás to 70 Mt/y. January 2006. Production this year is estimated
But that now has further to grow. at 6.251 Mt.
The considerable increase in the 2005
budget allocated for projects – $1.160 billion N.B. Capex figures are based on actual disbursements.
– is partly for new investments in 2005
(iron ore, pellets, coal, copper and nickel).
Total investment in logistics should attain The Fábrica Nova iron ore mine, in the Complex Carajás
$760 million in 2005. The fleet of railroad state of Minas Gerais, started up in April. It Carajás is an integrated mine-railroad-port
equipment will be expanded to meet is exploiting the Mariana deposit, in CVRD’s system, built and operated by CVRD.
demand for both iron ore haulage and Southern System, and uses the Today it is the backbone of the economic
general cargo for clients: 5,606 wagons Timbopeba beneficiation plant. It has a and social development of a huge area of
and 123 locos, with a total estimated nominal production capacity of 15 Mt/y north/northeast Brazil. CVRD’s mining and
value of $559 million. of iron ore, and production for 2005 is processing activities there embrace iron
estimated at 10 Mt. The total investment in ore, manganese, gold, copper, bauxite
Iron ore projects this project was $106 million. Some and, soon, nickel. The Serra dos Carajás
Five iron ore mining projects are underway $3 million was invested in environmental Range lies in Eastern Amazonia, southern
in the ‘Southern System’ – Brucutu, recovery and protection of the areas affected Pará State, at an average altitude of 650 m,
Fábrica Nova, Itabira, Fazendão and Fábrica by Fabrica Nova operations, in line with the some 680 km southwest of the State
– as well as the increase in production world best practices in environmental capital of Belém, and 280 km from
capacity at Carajás. When completed, protection. Marabá, the largest town in the region.
these projects will increase capacity by At the beginning of this year, CVRD Carajás is served by its own airport.
76 Mt/y, for capital expenditure totalling took over the operations of the Andrade On July 31, 1967, a team of Brazilian
$1.169 billion. The capacity of the mine under a lease contract with the geologists from Cia Meridional de
pelletizing plant at São Luís will be Brazilian steel maker Cia Siderúrgica Minerações - CMM (a subsidiary of U.S.
expanded from 6 to 7 Mt/y. The Port of Belgo-Mineira that extends for a period of Steel) landed in a clearing in Serra dos
Tubarão, in the state of Espírito Santo, is 40 years. At the same time, the company Carajás, where the ground had a visible
being expanded to increase the speed of started exploration to determine the overlay of iron ore. In April 1970, CMM
handling iron ore in order to reduce volume of reserves that will support the and CVRD became associated. CVRD was
demurrage costs. CVRD Executive Director capacity expansion plan for Andrade. already producing iron ore, had been
Finances Fabio Barbosa has predicted that Andrade is an additional source of iron since 1942, from the Itabira mines in
iron ore output will reach 275 Mt in 2007. ore for the Southern System. southern Brazil. Carajás exploration

10 International Mining December 2005

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IM ISSUE 4 18/11/05 6:48 Page 28

Operation focus More than 350 Fabri-Valve products for CVRD

C
VRD’s new Brucutu mine has chosen the Engineered Valves Group of ITT
continued until 1977, when U.S. Steel, Industries to supply more than 350 valves. Start-up of Brucutu is scheduled for
concerned about the high investment and 2007. It will use two types of ITT valves.
poor international market for iron ore at The Ported Slide Gate Valve is designed specifically for difficult slurry processes.
the time, withdrew from the project. Available in bonneted and unbonneted versions, ranging in size from 51 to 1.37 m,
June 1978 saw the start of track laying the design includes two constant contact seats, and gate support rings that reduce
for the 890-km Carajás railroad, linking the stress on the seats resulting in remarkable service life.
Ponta da Madeira on the Maranhão The Bi-directional Knife-Gate Valve is a full port valve used in water reclamation.
coastline to the Carajás resource. This Ranging in size from 51 mm to 914 mm, it provides a bubble-tight shutoff in both
launched the Carajás Iron Ore Project, directions at the full rated pressure. This valve has a unique, patented elastomer
which was to cost CVRD $3 billion in perimeter seat, which insures positive shut off independent of line-pressure.
direct investments: 56% for the railroad,
20% for the mine and beneficiation plant,
14% for the marine terminal, and 10% continuous growth trend, according recycles about 93% of its water. Pumping
for infrastructure. to the research note, which reaffirmed station I is at an elevation of 1,011 m.
Reserves of high-grade iron ore at its buy rating recommendation for CVRD. Some 62 hours after leaving there, the
Carajás are sufficient to guarantee Samarco’s iron ore reserves are located concentrate arrives at the Ponta Ubu
production for another 400 years, at in the Alegria Complex, in the eastern terminal next to the pelletizing plant.
current levels. The first orebody selected portion of the Quadrilátero Ferrífero, the The pipeline is made of API 5 LX-60
for mining was N4 (eastern area N4E) due rich iron-ore region of Minas Gerais. Belt steel plates, and of its total 396 km,
to ease of access to the railroad, shallow mining now accounts for some 70% of 346 km have a diameter of 508 mm and
overburden and low impurity levels. Its total ore transport, because of the lower 50 km a diameter of 457 mm. The wall
original mineable reserves totalled 1,200 Mt. operating costs, compared with conventional thickness varies between 8 and 19 mm.
mining, since there is no need for truck Almost all of the pipeline is buried at a
Innovative Samarco haulage, and it involves fewer pieces of depth of about 1.5 m, protected against
Samarco Mineração is a 50:50 joint venture equipment and lower consumption of corrosion by a PVC lining and a system of
between CVRD and BHP Billiton - mining diesel oil per tonne of transported ore. It is forced flow cathode protection.
beneficiating, pelletizing and a port to also safer. The principles of belt mining are The transport velocity ranges from 1.5
export pellets and pellet feed. It was the shown in the diagram. to 1.8 m/s, with a flow rate between
first to exploit itabirite, a low-grade iron Multiple faces are extracted and wheel 1,000 and 1,200 m3/h. At its highest
ore and now is the second largest seaborne loaders dump on to the 8-km mine belt point it crosses the Caparaó range, at an
exporter of pellets, selling its products to system that feeds the beneficiation facilities. elevation of 1,180 m. The pipeline’s useful
over 15 countries in Europe, Asia, Africa, In the crushing and screening plant, ROM life was initially estimated at 20 years, but
Middle East and the Americas. It has ore is reduced from 150 mm to a 12.5-mm due to careful maintenance, improved
about an 18% share of the world market. feed for the grinding section. Pre-primary operational control and lower corrosion
Samarco’s Germano unit (mining and and primary ball mills prepare the feed for and erosion rates, it is currently estimated
beneficiation plant, capacity 16.5 Mt/y of the flotation circuit. Prior to flotation, the that it can be double that.
wet concentrate) is in Minas Gerais, in the desliming process (three cycloning stages)
municipalities of Mariana and Ouro Preto. removes ultra fine particles (<0.001 mm) .. And CAEMI makes $2 billion
The Ponta Ubu unit (pelletizing plant and that are detrimental to flotation. The fines Caemi Mineracao e Metalurgia, a unit of
port facilities) is in Espírito Santo, in the recovery plant (cycloning and column CVRD, is going ahead with a $760 million
municipality of Anchieta. Iron ore flotation) recovers the fines discarded by expansion of the Itabaritos iron ore project
concentrate is pumped from Germano to desliming. There is then a secondary over the next three years.
Ponta Ubu in a 396-km pipeline, which grinding circuit, followed by column Caemi said the investment will expand
was built 28 years ago! Samarco is an flotation to prepare the product for slurry operations at its Mineracoes Brasileiras
open-pit mine with 4,000 Mt (a useful life transport and for the pelletizinng plant. Reunidas (MBR) subsidiary, Brazil’s No. 2
of about 50 years, at the current production Slurry is thickened to 70% solids, from iron ore producer and exporter, in Minas
rate) of iron ore resources. 45%, and then the final concentrate is
Over recent years, Samarco has pumped to the pipeline. All recovered
optimized production and raised capacity water is recycled. The beneficiation facility Diagram of ‘belt mining’
at its pelletizing plants to some 14 Mt/y
of pellets. In 2004, concentrate production
was 15.5 Mt (dry), of which 13.5 Mt
came from Samarco itself and 2 Mt were
acquired from CVRD. The company has
just received Board approval for its Third
Pellet Plant project. This will expand
capacity by 54%, raising it from the
current 14 Mt/y to 21.6 Mt/y. It is expected
that an investment of $1.183 billion will
be required to build a new concentrator
in Germano, a new 7 Mt/y pipeline
adjacent to the current pipeline and the
third pellet plant (7.6 Mt/y capacity). This
project will increase 50% owner CVRD’s
revenue by about 1.5% in 2008,
Deutsche Bank said in a research note.
The expansion highlights market demand
strength and supports iron ore’s

12 International Mining December 2005

IM ISSUE 4 18/11/05 13:34 Page 29

With its extension of 396 kilometers,

the Samarco pipeline links the units of
Germano (Minas Gerais) and Ubu
(Espírito Santo). Since it went into
operation, in 1977, it has transported
over 230 million tons of slurry,
consisting of 70% ore concentrate and
30% water.The ore travels for 63
hours, at a speed of 6.5 km/hour,
through 24 municipalities.

Above: A truck at Timbopeda mine.

Right: Map of Samarco’s operations.

Gerais. MBR achieved a new record in the

second quarter of 2005 with sales of 12.3 Mt,
making the total for the first six months 23.8 Mt.
The expansion comprises $462 million for
a new pellet plant, $282 million for a new
beneficiation plant and $15 million for a 4
km ore conveyor belt linking the pellet plant
and the processing units. The 7 Mt/y pelletiz-
ing plant at Nova Lima will export about
two-thirds of its production. The processing
plant at Mina do Pico in Itabarito will
produce 10 Mt/y of iron ore concentrate and is due to start-up in Furthermore, in order to increase its presence in this market,
the first quarter of 2008. CVRD is also “developing the pre-feasibility study of the São João
do Piauí nickel deposit, and conceptual studies for other deposits
Steeling itself
Besides iron ore, CVRD has invested significantly in other
constituents of steel. Indeed, Chief Executive Roger Agnelli has
signalled his target to diversify into new countries and metals
with the aim of becoming the world’s third largest mining firm
by the end of the decade. Few doubt that will come about.
Discovered in 1974, the Vermelho nickel deposit in the Carajás
mineral province is being developed, based on reserves of
44 Mt containing 1.5% Ni. Vermelho lies 70 km south of the
Carajás iron ore mines and 15 km east of the Sossego copper
mine. Its estimated production capacity is 46,000 t/y of nickel
metal, and 2,800 t/y of cobalt metal - with an expected
commercial life of 40 years.
The capex estimate is up to $1.2 billion, with start-up scheduled
for the fourth quarter of 2008. The project involves construction To all our Clients, Candidates and
of a high-pressure acid leaching (HPAL) plant to process nickel Friends - all the staff of Thomas
laterite. After almost five years of development of the process Mining Associates extend their
and project, CVRD believes that “by choosing the process based greetings and the opportunity of
on precipitation and re-leaching of nickel hydroxide it has selected
the most proven process, and the one with least risks in terms of
operational stability, environment, and work health and safety.”
Pilot plant campaigns were carried out at a technology centre
of excellence in Australia. Average leaching extraction exceeded
96%, and LME-grade nickel cathode was produced. CVRD
employed an international team with extensive operational
experience in HPAL and nickel producing plants and believes it
has minimized the risks of problems similar to those that have
been seen in second-generation HPAL plants.
CVRD says “the extensive infrastructure of Carajás and the
process-friendly features of Vermelho - in terms rheology and the
availability of good quality water at the site - place the investment
cost of the project at a more favourable level than those of other
laterite-nickel-based projects.”

December 2005 International Mining 13

IM ISSUE 4 18/11/05 6:49 Page 30

Operation focus

in the states of Goiás, São Paulo and

Paraná, aiming to turn Brazil into one of
the largest nickel producers of the world.”
In September CVRD made an offer to
acquire all of the outstanding common
shares of Canico Resource Corp.
Canadian-based Canico, describing itself
as “an emerging mid-tier nickel company”,
is developing the Onça-Puma nickel
laterite project in Pará State. The feasibility
study prepared by Hatch plans an open
pit, a high productivity smelting facility
based on conventional Rotary Kiln Electric
Furnace (RKEF) pyrometallurgical smelting
and all related infrastructure and
equipment necessary to produce and
deliver ferronickel to market from the
Onça Puma lateritic nickel deposits. days immediately preceding the Part of the Alegria mine’s 8-km belt system that does
The study considers building a two-line September 15, 2005 date of announcement the work of many haul trucks.
plant in two phases. Initially, a single line of CVRD’s intention to proceed with the
plant would be constructed over a Offer. The board of directors of Canico
37-month period commencing with basic has “determined that the Offer is fair to manganese ore: 53.7 Mt of metallurgical
engineering at a total capital cost estimated all shareholders of Canico and in the best ore (used to produce ferro-manganese
at $762 million. The first line would reach interests of Canico and its shareholders alloys) and 11.4 Mt of manganese dioxide
full throughput capacity of some 1.28 and, accordingly, has unanimously (for making batteries) with manganese
Mt/y of ore over an ensuing two-year recommended that shareholders of dioxide content of over 75%. The
ramp-up period. The second line would Canico accept the offer.” beneficiation plant, with an annual
be built over the next two years, at a total processing capacity of 1 Mt, came on
additional capital cost estimated at $352 Manganese and ferro-alloys stream in 1985. This plant produces three
million. When both lines are in full service CVRD is also one of the world’s biggest products: lump ore (50%), sinter feed
following ramp-up of the second line, the players in the manganese and ferro-alloys (40%), and gauge ore (10%).
smelter would process approximately market. Four CVRD companies produce In 2004, CVRD’s consolidated gross
2.56 Mt/y of ore. The yield will be a refined manganese ore and ferroalloys. Rio Doce revenue from the manganese and alloys
ferronickel product (about 25% Ni and Manganês (RDM) has three mines and business was $666 million. The company
75% Fe) for direct sale to stainless steel five ferro-alloys plants in the States of broke records in manganese ore with
mills. Bahia, Minas Gerais and Pará. Urucum nearly 2.7 Mt produced. This year, the
On November 11 Canico announced it Mineração has manganese and iron ore company expects to invest $93 million in
had entered into a definitive support mines and one ferro-alloy plant in the manganese and alloys business.
agreement with CVRD following agreement Corumbá, Mato Grosso do Sul. Rio Doce Manganese is the fourth most-used
with CVRD to improve the terms of its Manganèse Europe produces ferro-alloys metal in terms of volume, second to iron,
previously announced take-over bid. The in Dunquerque, France; and Rio Doce aluminum and copper. Nearly 90% of the
increased price represents a premium of Manganese Norway produces ferro-alloys ore produced in the world is used in the
approximately 53% over the volume in Mo i Rana, Norway. steel industry in the form of manganese
weighted-average trading price of The manganese deposits at Azul, ferro-alloys. Manganese ferroalloys are
Canico’s common shares on the Toronto Carajás were discovered in 1971. iron, manganese, carbon and silicon alloys
Stock Exchange (TSX) for the 30 trading Exploration outlined reserves of 65 Mt of used in the steel-making process to
remove contaminants or as an alloying
element to change the steel’s crystal
structure. The properties of steel are
changed entirely by adding manganese,
and the amount of manganese alloys
added depends mainly on what the steel
is to be used for. “Steel, as we know it,
would not have the same mechanical
properties were it not for the manganese
added to it,” explains Nelson Janotti,
CVRD’s Technical Advisor in the
Manganese sector. IM

The first Larox PF filters have been in operation in

CVRD’s Carajas plant for several years already,
dewatering fine hematite ore (Blaine value around 1500,
65 wt% < 45µm, slurry solids content around 65 wt%).
The most prevailing performance figure has been low
cake moistures, in the range of 8.0 – 8.5 wt%, while the
filter availability has been over 91 % in undisturbed
conditions. Regular and skilled preventative maintenance
is needed in order to keep the availability high.

14 International Mining December 2005