Codelco seals early contract deal with Ministro Hales union
The new three-year contract will take effect in December.
Vale (NYSE: VALE) announced on Wednesday that it expects to produce between 323 million and 330 million metric tons of iron ore in 2024, an increase from its previous forecast of 310 million to 320 million tons.
The Brazilian miner expressed confidence in meeting the upper end of its guidance set earlier this year. Shares of Vale rose 3% in New York after the production update.
Adding to this positive outlook, Vale has begun commissioning the Vargem Grande 1 project with wet processing at the Vargem Grande complex in Minas Gerais. This move, it said, will allow iron ore production to resume at around 15 million metric tons per year.
Since 2019, the Vargem Grande 1 plant has operated with natural moisture due to the unavailability of water capture and disposal at the Vargem Grande dam, which is currently undergoing de-characterization.
With the shift to wet processing, Vale expects to improve the average ore quality by approximately 2% in iron content.
“The project represents an important step towards achieving the iron ore production guidance of 340-360 million metric tons by 2026, resulting in an improved product portfolio, greater production capacity, and increased operational flexibility,” the Brazilian miner highlighted.
Following a tumultuous succession process, Vale’s incoming CEO, Gustavo Pimenta, has been tasked with maximizing iron ore output to boost efficiencies at the Brazilian mining giant, despite China’s declining demand for the steelmaking ingredient.
Iron ore traded near its lowest level in almost two years last week as China’s steel slowdown weighed on the global market.
Vale slightly lowered its forecast for nickel output in 2024 to between 153,000 and 168,000 metric tons, down from the previous estimate of 160,000 to 175,000 tons. The company attributed this adjustment to a partial divestment from Vale Indonesia, completed in July.
Additionally, Vale’s executive vice president of technical affairs, Rafael Bittar, told Reuters that the company expects to maintain annual investments of more than $400 million in research, development, and innovation (RD&I) over the coming years. In 2023, the company invested $447.8 million in RD&I.
According to Bittar, Vale’s RD&I efforts are focused on the future of mining, emphasizing the comprehensive use of autonomous equipment, control centers, minimally invasive techniques and a level of subsoil knowledge sufficient to extract only what is needed — aiming for zero waste, rejects and carbon emissions.
Currently, Vale has around 800 people dedicated to innovation efforts in Brazil.
(With files from Bloomberg and Reuters)
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