Brazil’s Vale (NYSE:VALE), the world’s No.1 iron-ore producer, saw a slight decline in second-quarter output, but still managed to beat analysts’ estimates, keeping a new annual production record in sight.
The Rio de Janeiro-based miner said it produced 86.8 million tonnes of iron ore in the April-to-June period, down 2.8% from a year earlier, when it hit a record high.
Compared with the first quarter, Vale’s production of the commodity climbed 12%, even though its Samarco joint venture has been shut since a deadly dam breach in November.
Vale’s iron ore production increased 12% compared to the first three months of the year.
The company is in the midst of ramping up production at its S11D mine, the iron ore’s biggest development project, which should be finished before year-end.
S11D, also known as Serra Sul, is part of Vale’s massive Carajás complex and will add another 90 million tonnes to the miner’s capacity, pushing it over 400 million tonnes per year.
Improving prices are behind Vale’s expansion plans. So far this year, iron ore has gained more than 20%, as seaborne with 62% percent content traded Thursday at $57.17 per tonne, or 2.6% higher than Wednesday, according to The Metal Bulletin.
Vale, which is also the world’s largest nickel producer, increased the base metal output by 17% in the second quarter to 78,500 metric tonnes. Copper, in turn, rose 2.4% in the period to 107,400 tonnes.
The company’s coal output, however, fell 25.2% in the quarter to 1.5 million tonnes.
Vale will release its earnings report next week.
