Vale adjusts to global shake-up

BRAZILIAN major Vale says its proactive response to cut back production and shut down higher-cost mines has softened the blow of the economic crisis on the company’s end of year production report.
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Vale's Carborough Downs operation.

Claire Svircas

Riding good operational performances in previous quarters, Vale managed to achieve eight production records for the year with 275,400t of nickel, 11.7 million tonnes of bauxite, 5Mt alumina, 311,600t copper and 4.1Mt coal.

Whilst iron ore suffered a 26.3% decrease in the December quarter compared to the previous quarter, coal production remained on track in Australia.

Coal output reached a record 1.1Mt for the quarter, 703,000t of metallurgical coal and 387,000t thermal coal.

The Integra mine in New South Wales was the dominant producer with 441,000t of coking coal and 184,000t of thermal.

The new Carborough Downs mine in Queensland produced 126,000t of coking coal for the quarter.

To protect itself from the global demand reduction and avoid inventory build-up, Vale shut down seven of its nine pellet plants in 2008 and postponed start-up operations at new plants, including two of the three that form part of a joint venture with Australian giant BHP Billiton in Samarco.

As a result pellet production fell 24.9% in December compared to the previous quarter.

Vale’s production of manganese ore reached 491,000t in the quarter, compared with 694,000t for September.

The company also shut down its manganese ore mines and ferroalloy plants in Brazil in December, with operations expected to resume in February 2009.

The volume of nickel produced increased 1.1% to 73,200t for the quarter; cobalt production added 5.6%; and bauxite reached a new record of 3.5Mt, an increase of 32.7% year on year.

Vale said the falls across its activities for the December quarter illustrates the efforts the company is making to adjust operational activities to current demand levels.