Vale’s iron ore output up 6% in first quarter, sales jump

Vale’s S11D iron ore mine in Pará, Brazil. (Image by: José Rodrigo Zermiani | Agência Vale)

Brazilian miner Vale on Tuesday reported growth of 6.1% in its first-quarter iron ore production from a year earlier, driven by improved output from a key project in northern Brazil, while sales in the period also jumped.

Vale’s iron ore output in the first three months of the year totaled 70.84 million metric tons, it said in a securities filing, buoyed by its S11D mine in Para state, which had its best performance in four years.

Sales of iron ore, meanwhile, rose 14.7% to 63.83 million tons.

The quarter ended March 31 was “marked by robust iron ore sales and consistent improvement in iron ore operations,” Vale said, “with S11D’s production the main highlight as it achieved its highest for a first quarter since 2020.”

The mining giant expects its total production of the steel-making ingredient to reach between 310 million tons and 320 million tons this year, a stable outlook compared to last year’s target that it managed to beat.

Vale noted that its “strong” sales figures in the quarter were driven by the absence of port-loading restrictions that had negatively impacted its Ponta da Madeira port in early 2023.

“The difference between production and sales is explained by Vale’s supply chain effects and the build-up of inventory,” the company said.

The average realized price of Vale’s iron ore fines stood at $100.70 per ton in the quarter, down from 15% from the previous three months due to lower futures prices.

RBC Capital Markets analyst Srivathsan Manoharan said in a note that Vale could benefit in the second quarter as iron ore prices tend to be better supported as China, the world’s largest iron ore consumer, enters a seasonally stronger period of demand.

Base metals

Vale also produced 39,500 tons of nickel in the first three months of the year, down 3.7% on a yearly basis, with sales declining 17.5% to 33,100 tons.

The firm’s nickel operations in Canada and Indonesia had stronger performances than a year earlier, but total output ended up compromised by a stoppage at its Onca Puma mine in Brazil, where it is renovating a furnace.

Copper production, meanwhile, was up 22.2% to 81,900 tons thanks to a “solid ramp-up” at the Salobo 3 project, the company said. Sales of the red metal jumped 22.5% to 76,800 tons.

Vale expects to produce up to 175,000 tons of nickel and 355,000 tons of copper this year. Average realized prices were down for both base metals in the first quarter, according to the firm.

(By Gabriel Araujo and Marta Nogueira; Editing by Kylie Madry and Jamie Freed)


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