The J. Mendes group said in a statement that its subsidiary JMN Mineração has halted operations at its iron ore mine, located in the state of Minas Gerais, between the municipalities of Desterro and Piracema.
Citing low iron ore prices and high logistics costs, chiefly the Brazil-China freight rate, the company follows similar moves by Itaminas, CSN Mining, Cabo Verde and Usiminas Mineração.
Although it does not ship iron ore to China, JMN was affected by sea freight costs because its domestic customers base local prices on international benchmarks.
According to shipbroker Banchero Costa, the Tubarão-Qingdao freight rate, the benchmark for Brazil-China iron ore shipments, currently stands at $33.20 per metric ton (mt), up 41.4 percent year on year, an increase attributed to higher bunker fuel prices driven by the war in the Middle East.
The group also owns the iron ore miner Ferro+ Mineração, which produces 7 million mt per year, while JMN has an estimated production capacity of 2 million mt per year.
