Despite adverse weather, Vale reports Q1 iron-ore record

VANCOUVER (miningweekly.com) – The world’s largest iron-ore producer, Vale, has lifted production of the steel-making ingredient to a new record high in the first quarter ended March, touching 86.2-million tonnes despite inclement weather.

The diversified miner boosted iron-ore output by 11.2% over the comparable quarter of 2016, despite production falling 6.7% over the December quarter, resulting in 6.2-million tons lower output over the prior quarter as “usual weather-related seasonality” in the first quarter impacted on the performance of the northern system.

The year-on-year improvement was mainly attributable to the ramp-up of the giant S11D and Itabiritos projects, in the south-eastern system.

Vale sad the northern system, which comprises Carajás, Serra Leste and S11D, achieved a record for a first quarter of 36-million tons, 11.1% higher year-on-year, because of the S11D ramp-up, which is advancing according to plan.

Blended volumes in Asia totalled 12.4-million tons in the first quarter, 10.3-million tons and 6.5-million tons higher than in the comparable quarters of 2015 and 2016, respectively, as a result of the ongoing strategy to bring more flexibility to the integrated supply chain by increasing offshore blending capacity. Vale believes that this strategy will enable rapid responses to change in iron-ore market conditions.

The ongoing offshore blending activities require the build-up of offshore inventories and, as a result, temporarily lead to lower sales volumes when compared with shipment volumes from Brazil.

Nickel output reached 71 400 t in the first quarter, 14% and 2.9% lower than in the fourth and first quarters last year, mainly owing to planned maintenance shutdowns at operations in Indonesia and Japan, and operational challenges at the Thompson operations.

Finished nickel products from Vale New Caledonia reached a record 10 200 t in the period.

Copper output totalled 109 000 t in the first quarter, 11% and 2.6% lower than the comparable fourth and first quarters of 2016, respectively, mainly owing to the lower production from Sudbury, in Canada. Copper concentrate production at Salobo totalled a record 42 600 t for the first quarter, 3.6% higher year-on-year.

Coal output in Mozambique reached a quarterly record of 2.4-million tons in the period, up 170.4% year-on-year and 53.7% over the prior quarter, mainly because of the continued and strong ramp-up of the second coal handling and preparation plant (CHPP2). CHPP2 output grew by 86% in the first quarter compared with the December period.

Vale’s Global Recovery metric increased from 44% in the first quarter of 2015, to 49% in the same period of 2016 and to 51% in 2017, mainly attributable to the continued increase in operational productivity over the past few years.

The production guidance for 2017 remains within the 360-million- to 380-million-ton range and from the end of 2018 onwards, Vale expects to hit its long-term base case target of 400-million tons of iron-ore.