Business News Americas reporetd that current iron ore prices which slumped to nearly their lowest level in 5 years as Chinese house prices cool and mining companies ramp up production are not sustainable in the long term.

Mr Marcus Severini, accounting director at Brazilian mining giant Vale said that only a price range of USD 115 per tonne to 120 per tonne would provide stability to the sector.

Mr Severini said that "Current prices aren't sustainable in the long term. They are too low. They create enough revenue to cover costs, but not enough to finance the development of new mines. Vale has one of the lowest production cost structures in the iron ore market.”

He said that iron ore dropped to just over USD 87 per tonne the lowest price since September 2012. It takes six to eight years to develop a new iron ore mine long enough for prices to rise. But Vale is prepared to operate under current prices, if necessary.

He added that Brazil's coming presidential elections in October would have no negative impact on the company. The company is continuing to look for opportunities to reduce costs and promote the sale of non-strategic assets, although a large part of that strategy has already been implemented.