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Vale aims for quality over quantity

Bnamericas Published: Monday, December 02, 2019
Vale aims for quality over quantity

Brazilian mining giant Vale announced its iron ore production estimates for the next years, also affirming the company will not sacrifice quality for the quantity increase.

"We expect to resume some 15Mt of iron ore capacity in 2020 and another 25Mt in 2021 as we recover some operations halted after the Brumadinho dam accident in January this year," Vale's ferrous minerals director Marcelo Spinelli told the company's annual Vale Day meeting with investors in New York.

With the move, iron ore output will reach 340-355Mt in 2020 and 375-395Mt in 2021. The output volume in 2018 - just before the Brumadinho event - was 385Mt, the company said, adding that it expects capacity to reach 390-400Mt/y from 2022.

"The numbers are in line with the company's wishes, as Vale wants to return to 2018 volumes and break-even cost levels," Spinelli said.

According to the executive, Vale's production level relies on market conditions and on the value over volume approach. Also, the resumption of halted operations and productivity gains will be translated into a decrease in the company's C1 cash costs, which will go to US$13.0-13.5/t in 2024 from US$15/t estimated at end-2019.

BRUCUTU

Spinelly told the meeting that on Monday Vale will temporarily suspend the tailings disposal at the company's Laranjeiras dam at the Brucutu mine. The stoppage is expected to last up to two months, according to the executive.

"My team just called me this morning saying that a small crack was found on part of the structure. So, we decided to suspend the tailings operation immediately," Spinelli said.

In a statement, Vale said the Brucutu plant will operate with around 40% of its capacity through wet processing with tailings filtration and dry stacking, so the impact of the temporary halting is estimated at 1.5Mt/m of iron ore.

The stoppage does not lead to changes in Vale's iron ore and pellet sales guidance, which remains, in 2019 and in 4Q19, between 307Mt and 312Mt and 83-88Mt, respectively. Nonetheless, for 1Q20, production and sales are expected to range between 68Mt and 73Mt, due to weather-related seasonality, the gradual and safe return of operations and in line with the margin over volume strategy," the company said.

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

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