Vale sees key mine topping iron ore output forecasts in 2018 -source

RIO DE JANEIRO, May 24 (Reuters) – Brazilian miner Vale SA expects iron ore output at its premier S11D mine to reach 58 million tonnes this year, above an official forecast of 50 million to 55 million tonnes, a person familiar with the matter said.

The expected increase is due mainly to selling more "canga," or iron ore with a higher grade of contaminants – along with iron ore, since it has shown strong demand, said the person, who spoke this week. The source requested anonymity because the data is confidential.

When asked for comment, Vale reiterated the official forecast issued in December.

The world's largest iron ore producer is still ramping up production at the S11D mine in the Amazonian state of Para, which was inaugurated in December 2016.

Heavy capital spending on the project drove up Vale's debt, coinciding with a sharp slide in iron ore prices. Vale currently expects the mine to produce 90 million tonnes of iron ore annually when it completes its rampup in 2020.

(Reporting by Alexandra Alper; Editing by Matthew Lewis)