The iron deposits of the Northern Iron System are hosted in the Precambrian rocks of the Itacaiunas Supergroup. The basement of the region consists of the Pium Complex ortho-granulites, and Xingu Complex gneiss and migmatites. The volcanics and sediments of the Itacaiunas Supergroup overlie the basement, and are in turn overlain by Aguas Claras clastic sediments. Granites, gabbros, and granitoids intrude the sedimentary sequence. The Carajas ores are hosted by the Grao Para Group of the Itacaiunas Supergroup, composed of meta-basalts, meta-sediments, ironstones, and meta-rhyolites. The ore deposits lie within an approximately 300 to 400 meters thick banded chert-hematite jaspilite unit that occurs between thick volcanic units.

The lower volcanic unit is the Parauapebas Formation (4,000 to 6,000 meters thick), and consists of bimodal volcanics (dominantly massive, vesicular and porphyritic flows and agglomerate breccias of metabasalt, meta-basaltic andesite and meta-trachyandesites), with subordinate (10 to 15 percent) meta- rhyolitic tuffs and flows.

The Carajas Formation hosts the deformed banded-iron formations (BIFs) with some interbedded mafic meta-volcanics. The Cigarra Formation (upper volcanic unit) is similar to that of the Parauapebas Formation with mixed meta-sediments (fine grained tuffs, tuffaceous siitstones, phyllites, cherts and greywacke). The volcanic sequence has generally been weathered to a depth of 100 to 150 meters. The oxidation is observed to a depth of 500 meters in the banded iron formation (BIF) of the ore zone. The local stratigraphic sequence of the Itacaiunas Supergroup in the area of the Northern System, as shown in Figure 3-2, is as follows:

¦ Upper Group: Igarape Bahia Aquiri Group - meta sedimentary and metavolcanic rocks (including manganese beds in Aguas Claras Formation)

¦ Middle Group: Grao Para Group - meta-sedimentary and meta-volcanic rocks
- Upper Formation: Cigarra Formation - meta-volcanics.
- Middle Formation: Carajas Formation - predominantly banded iron formation with lesser mafic meta-volcanic units.
- Lower Formation: Parauapebas Formation - bimodal metavolcanic rocks and metasedimentary rocks with intercalated discontinuous banded iron formations.

The Serra dos Carajas basin is cut by major E-W and N70°W trending regional lineaments. The area is affected by numerous minor regional faults (sigmoid form). The most outstanding discontinuity is the WNW-trending Carajas Fault that divides the basin into two domains, North and South, with the N5 deposit located in the more structurally complex northern domain.

The structurally most complex northern domain contains folded, faulted, and rotated iron ore bodies (N1 to N9 and Serra Leste). Several N-S oriented minor sympathetic fractures control the orebody configuration.

The southern domain includes orebodies that dip to the north (SI to S4). These orebodies are part of the south flank of the major structure, and show no apparent block movement or rotation.

Jaspilite represents the proto-ore of the Carajas region deposits, typically with 15 to 45 percent Fe (but can range up to 57 percent) and 35 to 65 percent Si02. The jaspilite is characterized by alternate light and dark colored micro-bands. Light colored layers are generally white to pale red, and consist of crypto- to micro crystalline quartz with inclusions of cryptocrystalline hematite and lesser martitized magnetite plus occasional sericite. Dark colored layers consist of fine-grained hematite and martitized magnetite.

Deep leaching of the jaspilite has resulted in the progressive migration of silica, forming hard hematite at depth. With proximity to the surface, the weathering has resulted in the formation of soft hematite. Both hard and soft hematites represent enriched iron mineralization with iron contents typically ranging from 60 to 68 percent Fe. Near-surface weathering has created an iron laterite layer at the surface.

The main mineralized lithological units of the N5 deposit are shown in the photographs in Figure 3-3.

* Hard Hematite: Compact, blue-gray, massive hematite, with a metallic luster, high density, and low porosity. Iron grades range from 65 to 69 percent. It is primarily used in the production of the export lump ore. Hard hematite is an increasingly rare iron oretype in Vale's Carajas operations.

* Soft Hematite: Massive hematite occasionally pulverized, highly porous, very weak, and slightly magnetic, with average iron grades of around 65 percent. It is the primary ore mineral, and is generally sufficiently friable to be excavated without blasting. Comprises the main source of sinter feed and pellet feed products.

* Canga: Canga is the uppermost unit and consists of a lateritic-saprolitic material that is the product of surface weathering of the underlying iron mineralization (Structural Canga) or barren mafic rocks (Chemical Canga). Mineral Canga consists of blocks of hematite cemented by hydrated iron oxides (goethite and limonite). It is generally 15 to 20 meters thick.

The ore reserves in the Northern System are comprised of hematite. Because of the high grade (66.7% on average) of the Northern System deposits, Vale does not need to operate a concentration plant at Carajas. The beneficiation process consists simply of sizing operations, including screening, hydrocycloning, crushing and filtration.

In Serra Norte, one of the major plants applies the natural moisture beneficiation process, consisting of crushing and screening, and the other applies both the natural moisture and the wet beneficiation process in distinct lines. The wet beneficiation process consists simply of sizing operations, including screening, hydrocycloning, crushing and filtration. Output from this site consists of sinter feed, pellet feed and lump ore.