By Jeffrey T. Lewis

SÃO PAULO--Brazilian mining giant Vale SA said net income increased in the third quarter on the higher price for iron ore and as costs and spending related to the Brumadinho mining disaster declined from a year earlier.

Vale said Wednesday it had net income of $2.9 billion in the period, from $1.7 billion in the third quarter a year earlier. Net operating revenue rose to $10.8 billion, from $10.2 billion in the year-earlier period. The company reported adjusted earnings before interest, taxes, depreciation and amortization of $6.1 billion, from $4.6 billion a year earlier.

The company said last week that output and sales of iron ore rose in the third quarter from the second quarter as the company was able to normalize both production and logistics in the period.

The reference price of iron ore averaged $118.2 per dry metric ton in the third quarter, from $102 a year earlier, the company said. Vale reduced costs to $5.3 billion in the third quarter from $6.3 billion in the same period a year earlier, while spending related to Brumadinho fell to $114 million from $225 million a year earlier.

The collapse in Jan. 2019 of a dam containing mining waste in the small town of Brumadinho took the lives of 270 people, many of them Vale employees. The company reported spending of $403 million related to the tragedy in the first nine months of this year, down from $6.3 billion in the same period a year ago, but the final cost of the accident to the company is still unknown because of ongoing court cases.

Vale also faces more potential costs from continuing litigation over an earlier accident at a dam owned by Samarco SA, a miner half-owned by Vale, and investors are concerned about the unknown financial burden both cases might place on the company, according to Christopher LaFemina, an analyst for Jeffries.

"There are issues related to both disasters and it's not clear if there will be clarity about that any time soon," he said. "It's been a major overhang on the stock."

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com

(END) Dow Jones Newswires

10-28-20 2001ET