MARKETS

Vale earnings fall with metal prices

VALE said although its earnings softened in the September quarter in the wake of lower metal prices, the results were still solid.

Kristie Batten
Vale earnings fall with metal prices

Revenue fell 9.8% quarter-on-quarter to $US11 billion ($A10.6 billion), while earnings plunged 32.5% to $2.7 billion.

“Vale had a financial performance that reflected the challenges stemming from the downward price volatility typically created by a global economic deceleration, which combines the effects of a weaker demand for minerals and metals with negative expectations,” the company said.

“Mining is fundamentally a cyclical industry and is thus exposed to high price volatility.

“In such environment and in light of prospects of a more moderate expansion of the world economy in the years to come, higher productivity and lower cost levels are of paramount importance to thrive in a very competitive global market.”

The company said it would focus on strengthening capital efficiency and would prioritise investment in world-class assets such as its Carajas S11D iron ore project and Moatize coal project.

Vale said it would continue divestments of non-value adding assets and was developing initiatives to streamline the cost structure of operating and corporate activities.

“The competitiveness of our iron ore business is being enhanced through initiatives to cut costs, increase productivity, improve quality and expand the global distribution network,” Vale said.

“As the global leader in iron ore, by size and quality of production and reserves, we will continue to benefit from a scenario of growth and structural transformation of emerging market economies.

“We strongly believe that the execution of a strategy anchored on a rigorous discipline in capital allocation and the exploitation of our rich endowment of mineral resources will enable us to deliver substantial value over the next few years.”

Last week Vale reported its quarterly operating results.

Iron ore production was 83.9 million tonnes, up 4.2% on the June quarter, with all sites posting increases.

Iron ore production for the 12 months to September 30 was 317.4Mt.

Pellet plants have been temporarily halted due to demand, but the company started pre-stripping at the N5 South mine in Carajas.

Meanwhile, the ramp-up of Moatize and Bayovar led to all-time quarterly output figures of 1.2Mt for metallurgical coal and 2.1Mt for phosphate rock.

Since the end of the quarter, Vale has started production at its 50%-owned Lubambe copper operations in Zambia, its second African project.

TOPICS:

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production

editions

Mining Magazine Intelligence Automation Report 2023

An in-depth review of operations using autonomous solutions in every region and sector, including analysis of the factors driving investment decisions

editions

Mining Magazine Intelligence Exploration Report 2023 (feat. Opaxe data)

A comprehensive review of current exploration rates, trending exploration technologies, a ranking of top drill intercepts and a catalogue of 2022 Initial Resource Estimates and recent discovery successes.