Vale (NYSE: VALE) announced on Wednesday it expects to produce 300-305 million tonnes of iron ore this year, missing a previously lowered 2020 target of at least 310 million tonnes.
The company expects annual production of between 315 and 335 million tonnes for 2021.
“We think the 2021 guidance is particularly frustrating, especially considering management has recently stated the starting point for 2021 is 318mt,” analysts at Bradesco BBI investment bank said in a research note to Reuters.
In 2018, before the Brumadinho dam collapse, Vale produced 385 million tonnes.
Vale also said it plans to set aside an additional $670 million from its fourth quarter earnings to improve safety at its dams. That would bring total provisions for that purpose to $2.7 billion.
The company announced last week the approval from environmental authorities in the northern state of Pará, Brazil, to resume expansion activities at its Serra Leste mine.
The expansion includes the refurbishment of an iron ore mill that is scheduled to bring the processing capacity of the installation to 10 million tonnes per year by early 2023, the company said.
The miner sees its copper production rising from 390,000 tonnes next year to around 500,000 tonnes in 2025, averaging 455,000 tonnes in the years between. Nickel output should average 200,000 tonnes over the next three years, Vale said.
Vale announced on Wednesday a 766MW solar energy generation project called Sol do Cerrado, in Minas Gerais, Brazil, as part of its actions to transition to carbon neutral mining.
The $500 million project contemplates the construction of a photovoltaic plant, including 17 sub-parks, which includes the implementation of an elevator substation, transmission line and connection bay, with contracts signed for connection to the Brazilian National Interconnected System.
The plant is due to commence operations by Q4 2022 and produce about 193MW per year, about 13% of Vale’s estimated demand in 2025.
Vale has also presented during a virtual meeting with investors the goal of reducing net emissions of scope 3 by 15%, related to its chain of suppliers and customers, by 2035. The percentage of reduction considers numbers from 2018, when 586 million tonnes of CO2 equivalent (MTCO2eq) from its value chain were accounted for. The company expects to reach 496 MTCO2eq in 2035, a difference of 90 MTCO2eq from that recorded in 2018.
Currently, 98% of Vale’s CO2 emissions come from scope 3.