But access to port and infrastructure constrained growth in its Australian coal operations, the company said.

Revenues from sales of coal products worldwide reached a record $217 million in 3Q10, showing an increase of 17.3% over the $US185 million in 2Q10. The better performance was due to higher selling prices.

Revenues from shipments of thermal coal were $113 million and $104 million from metallurgical coal.

Despite the record level of coal production in 3Q10, sales volumes dropped, reaching 1.704 million metric tons against 2.245 Mt in 2Q10.

“The asymmetry between output and sales performance was due to the temporary lack of railroad and port availability in Australia to transport the larger volumes of production,” the company said.

The company said that in 3Q10 it sold 1.139 Mt of thermal coal – versus 1.390 Mt in 2Q10 – and 565,000 metric tons of metallurgical coal – versus 855,000 metric tons in 2Q10.

The average sale price of metallurgical coal in 3Q10 was $US184.60 per metric ton, 39.8% higher than 2Q10, and $US98.73 per metric ton for thermal coal against $US52.05 per metric ton in the previous quarter.

“The increase in sales prices reflects a strong demand for coal and the result of the switch to a quarterly pricing system, a move made simultaneously to the changes in iron ore pricing, and which reflects market conditions more accurately,” the company said.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBTIDA) for the coal business reached $72 million, marking a return to positive cash generation after five quarters.

Overall for the company, operational income and margin, net earnings and cash generation were also up as a result of discipline in capital allocation, the quality of its assets and efforts to maximise operational efficiency.

It reported a record operating income, as measured by adjusted EBIT of $7.8 billion in 3Q10, 69.2% above the $4.6 billion in 2Q10.

Record operational margin, as measured by adjusted EBIT margin, increased to 55.6% in 3Q10 from 47.9% in 2Q10.

It also enjoyed a record cash generation, as measured by adjusted EBITDA of $8.8 billion in 3Q10, $2.4 billion above the previous record in 3Q08 and $3.2 billion above 2Q10.

Alongside the all-time high quarterly figures for revenues, margins, earnings and cash flow, Vale invested $14 billion in the first nine months of 2010, and is returning $5 billion to shareholders while deleveraging the balance sheet.

“We continue to pursue sustainable shareholder value creation, implementing the growth strategy with discipline in capital allocation, consistent with a long-term vision of the mining business,” the company said.