Vale SA said on Monday that its second-quarter iron ore production totalled 67.6 million tonnes, up 5.5% from a year earlier and 13.4% higher than the first quarter, despite the impact of the novel coronavirus.
Vale said it was keeping its full-year outlook for iron ore fines production unchanged at 310-330 million tonnes but emphasized that the most probable scenario was for output to be at the lower end of that range.
The result comes soon after iron ore prices surged to their highest level in almost a year last week, above $111 a ton, amid a shortage of world supply as China reopens its economy. China has been boosting imports for the key steel ingredient.
Vale’s key northern Brazilian mine S11D reached a annualized “run-rate” of 91 million tonnes in June, likely to improve further in the second half, pushing annual production slightly above 85 million tonnes, it said.
Nevertheless, a negative impact on production from the coronavirus of 3.5 million tonnes offset much of the improvements in the north.
Vale has been trying to recover output since a tailings dam in the town of Brumadinho burst early last year, killing some 270 people and forcing many similar structures to be shut down.
(By Sabrina Valle; Editing by Christian Plumb and Himani Sarkar)