Vale announces capex cut for 2018

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Thursday, December 7, 2017

Vale has reduced its capex for 2018 to US$3.8bn from the previous US$3.9bn and from US$4.1bn this year, the Brazilian mining giant said in a report presented Wednesday during the company's annual Vale Day meeting with investors in New York.

Of the total, US$900mn will be allocated to growth and US$2.9bn for sustaining capital and project replacement.

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The company has been constantly reducing its capex from the US$18bn peak in 2011.

According to the report, Vale has also reduced its planned capex for 2019-22 to US$15.1bn from US$18.1bn.

GUIDANCE

Vale said it expects to produce 365Mt of iron ore this year and 390Mt in 2018.

On October 19, Vale said iron ore production will be within the lower end of the 360-380Mt guidance range for 2017.

In the latest report, Vale also reaffirmed its long-term base case target of 400Mt of total iron ore production per year during 2019-22.

The company added that increased output from its northern system, where Vale's largest mine Carajás sits, "will allow higher blended product volumes, therefore increasing the inventory level offshore (Malaysia and China) in 2018."

Rio de Janeiro-based Vale is the world's largest iron ore producer and exporter.