Ecuador mineral exports could fall by some 20% this year, says official
Mining exports were worth $3.3 billion for Ecuador in 2023.
Brazilian miner Vale (NYSE: VALE) the world’s largest iron ore miner, became the latest casualty of the current market conditions as it posted an unexpected $2.8 billion in financial losses associated with depreciation in the local currency during the second quarter and lower sales for the steel making material.
The results, announced Wednesday, are one of Vale’s worst in a decade and represent a profit drop of 84% for the period. Net income fell to $424 million, compared with a profit of $2.6 billion in the same quarter last year.
However, the Rio de Janeiro-based miner said its substantial investment budget could ultimately benefit from a weaker Brazilian currency. As an example, Vale cited its expansion of the Carajas iron ore mine in the Amazon. The estimated capital expenditures in mining and logistics for the project known as S11D through 2018 are estimated at $19.7 billion, based on an exchange rate of BRL2.00 to the dollar.
“[Real-denominated] expenditures represent around 90% of the budget for the S11D program, which is our largest project,” Vale said in a press release. “Such savings are not yet reflected in the expected capex for the approved projects under construction.”
The diversified miner also noted that copper, gold and coal production achieved all-time high figures, at 91,300 t, 63,000 oz and 2.4 million Mt, respectively, while nickel output remained at 65,000 t, its best second quarter since mid 2008.
Most of Vale’s plans, with the exception of its $6.5 billion coal-related projects in Mozambique, are located in Brazil. A weaker real, said Vale, will generate savings on capital expenditures as long as more than half of a project’s costs are denominated in Brazilian currency.
Comments
Cláudio Rezende
I believe the company has an enormous potential for better results soon.