Vale says Q2 output rises 5.5% despite pandemic

Image courtesy of PT Vale Indonesia.

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.

Vale has been trying to recover output since a tailings dam in the town of Brumadinho burst early last year

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)

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