Vale’s iron ore output hit fresh record high despite trucker strike

Brazil’s Vale (NYSE:VALE), the world’s No.1 iron ore miner, said Monday that production of the steelmaking material and pellets hit a fresh record high for a second quarter despite a nationwide trucker strike that paralyzed the country in May.

The Rio de Janeiro-based miner said iron ore output hit 96.755-million tonnes in the three months to June 30, while pellet output reached 12.838-million tonnes, despite delivery issues.

Vale's 2,000 km (1,240 miles) of railways allowed it to deliver shipments to port and getting key inputs to mines and processing plants.

Latin America’s largest country ground to a halt in May as truck drivers created hundreds of roadblocks for 11 days, protesting rising fuel costs. Some miners halted operations while others, including Companhia Siderurgica Nacional, declared force majeure.

But Vale's 2,000 km (1,240 miles) of railways allowed it to deliver shipments to port and getting key inputs to mines and processing plants.

The miner’s northern system — composed of its Carajás, Serra Leste and its massive S11D mine — boasted output of 46.2-million tonnes in the second quarter of the year, or 11.4% more than Q2 2017, thanks to the S11D ramp-up.

A drop in global iron ore output in the first three months of the year due to heavy rains, followed by China’s measures to cut pollution, boosted demand for Vale's top-quality ore. As a result, sales of the commodity and pellets also reached a record high in the quarter, totalling 86.5-million tonnes combined.

Vale, also the world's No.1 nickel producer, said production of the metal hit 66,200 tonnes. Last month, the company announced it had decided to move ahead with construction of an underground mine at its Voisey’s Bay nickel mine, located in Canada’s Atlantic province of Newfoundland and Labrador, extending operations by at least 15 years.

Soaring nickel prices were a key part of Vale’s decision. The commodity has climbed around 75% over the past 12 months on the back of environmental production cuts across top producer China, plunging inventories and strong steel prices.