Vale signals a coal acquisition hunt

MAJOR Brazilian miner Vale reportedly plans to invest $US24 billion in 2011 and will consider acquisitions, considered necessary in the coal space if the company wants to hit production targets for the commodity.
Vale signals a coal acquisition hunt Vale signals a coal acquisition hunt Vale signals a coal acquisition hunt Vale signals a coal acquisition hunt Vale signals a coal acquisition hunt

Integra Underground, courtesy Vale.

Blair Price

Vale chief financial officer Guilherme Cavalcanti said the company was open to acquiring resources if the “right opportunities” arose, according to the Metal Bulletin.

Vale chief executive officer Roger Agnelli reportedly said all investments would be made from the company’s own capital.

He also confirmed the company aimed to reach 40 million tonnes of coal production and 450Mt of iron ore output by 2014-15, according to the report.

Vale’s coal production for the September quarter was 1.9Mt from its operations around the world, an “all-time” quarterly high.

Such a performance annually would leave Vale’s production at 7.6Mtpa – far off the goal of 40Mtpa in four years.

Vale’s Carborough Downs longwall mine in Queensland is facing geotechnical challenges and produced 850,000 tonnes of metallurgical coal for the first nine months of 2010.

But even if the mine successfully ramped up to its intended rate of 4Mtpa, Vale would still be forced to make acquisitions to reach the 40Mtpa goal.

Vale also half-owns the Isaac Plains open cut mine in the Bowen Basin with Aquila Resources, with this mine aiming to ramp up to 4Mtpa run-of-mine.

topics

loader