May 8, 2019 / 2:43 PM / a year ago

UPDATE 1-Vale iron ore output, sales slump after deadly Brazil dam burst

(Adds market reaction, analyst comments)

By Marta Nogueira

RIO de Janeiro, May 8 (Reuters) - Brazil's Vale SA said on Wednesday that its iron ore production and sales slumped in the first quarter from a year earlier, reflecting the impact of the deadly collapse of a tailings dam at Brumadinho in late January.

Iron ore output fell 11 percent to 72.87 million tonnes while sales of the commodity slid 22 percent in the three-month period to 55.416 million tons.

The world's largest iron ore exporter shuttered various mines after the dam at Brumadinho collapsed, unleashing a torrent of toxic mud that buried nearby buildings, including a company cafeteria, killing 236 people, with 34 still missing.

Vale shares, which have gained 16 percent from the low they hit immediately after the disaster, were down 1 percent on Wednesday, declining a bit more steeply than other global mining stocks, which were also mostly negative as iron ore prices slipped.

Analysts at Credit Suisse called the figures "weak" but also "largely as expected by the market" in a research note.

The production numbers came a day ahead of Vale's quarterly results. Analysts and investors will closely scrutinize the results for the impact of the Brumadinho disaster on profits, which will be partially offset by a rally in iron ore prices largely sparked by the dam burst. (Reporting By Marta Nogueira; editing by Jonathan Oatis Editing by Chizu Nomiyama)

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