The Fortescue Metals Group Limited (ASX: FMG) share price is up nearly 5% to $5.09 today despite the iron ore miner releasing no specific news to the market.
Unfortunately it's likely the price is rising after iron ore prices jumped on the back of the tailings dam collapse in Brazil at a mine operated by Vale S.A. that has reportedly led to the deaths of at least 60 people.
This is the second iron ore mining tragedy to hit Brazil in a few years after a mine jointly operated by BHP Billiton Limited (ASX: BHP) and Vale S.A. at Samarco in Brazil collapsed and killed 19 people.
Both Vale S.A. and BHP are still negotiating final compensation amounts for the Samarco victims and environmental damage, with prosecutors reportedly demanding up to US$41 billion from the miners.
The News Corp press is also reporting that Brazilian prosecutors are likely to seek criminal charges against executives at Vale S.A. which all adds to a picture of iron ore supply potentially being curtailed while Vale S.A. works through remediation across its Brazilian operations and executives worry about the possibility of Brazilian jail time.
Fortescue as an exclusively WA-based iron ore miner may benefit from the chaos in Brazil, as iron ore prices are already rising on bets that Brazilian production could be slowed while operators in the country work to improve safety.
