Vale CFO confirms iron ore production target

“China is producing more than 3 million tonnes of steel a day, for the past 69 days. Demand is very strong now,” said Siani Pires.

Vale also expects to reach an iron ore capacity of 400 million tonnes per year by increasing output across its operations.

The company currently has the capacity to produce 318 million tonnes a year. In 2018, before the Brumadinho dam collapse, Vale produced 385 million tonnes.

Investment grade

Last week, Vale regained an investment grade rating from Moody’s. The financial services company said the upgrade to Baa3, the lowest investment grade, reflected improvements in Vale’s environmental, social and governance (ESG) practices.

In 2019, the ratings agency downgraded Vale to junk status after its tailings dam collapsed in Brumadinho.

Moody’s cited enhanced risk management and governance oversight of tailings dams, including the appointment of a safety and operational excellence officer.

“Vale has invested on the governance side, creating the new safety and operations office with a staff of 400 people to oversee the business units,” Siani Pires told Bloomberg.

“The company also improved its tailings management with external independent engineering companies monitoring operations.”

In an interview with the Financial Times, Siani Pires said he was pleased the company’s efforts had been recognized by Moody’s but the journey was not complete.

“They want to continue to see progress to continue to upgrade our rating,” he said.

But from a “purely” financial standpoint, Siani Pires said Vale should have a similar credit rating to rival iron ore producer Rio Tinto, which is rated single A.