Rio Tinto sells copper mine stake to Sumitomo for $399 million
Sumitomo is slated to acquire a 30% equity share of the Winu project in Australia.
The steel industry will take more time than initially thought to adopt production models that reduce their carbon footprint, due mainly to higher costs associated with those models and a challenging global market for steelmakers.
“It has been hard for them to transition to lower-carbon products, hard to maintain the business in a profitable way,” said Gustavo Pimenta, chief executive of Vale SA, one of the world’s largest suppliers of iron ore.
“It is going to happen (the decarbonization), but it will take more time,” he told reporters at the New York Stock Exchange after the company’s annual investors’ day.
Steel producers around the world have been pressured by increased costs due to high interest rates and lower steel prices on the back of China’s faltering economy. Pimenta said they are looking mostly at staying profitable at the moment, preferring cheaper raw materials.
Vale has been vocal about producing high-quality grades of iron ore that result in lower carbon emissions, but price is a big issue currently, said the CEO.
“Clients at the auto industry, for example, are not willing yet to pay for products that are lower in carbon,” he said.
Vale on Tuesday estimated It will produce between 325 million and 335 million metric tons of iron ore in 2025, compared with about 328 million tons this year.
The 2024 figure was within a previously announced 323 million to 330 million ton forecast.
“The iron ore production target and capex (capital expenditure) for 2025 were both in line with our official estimates,” Itau BBA analysts said in a note.
The Brazilian company reiterated it expects to keep increasing iron ore output in the coming years, estimating it to reach between 340 million and 360 million tons in 2026 – unchanged from a previous forecast – and about 360 million tons in 2030.
RBC analysts reacted negatively, saying that although iron ore output and cost projections met expectations, lower iron ore premiums should help trigger consensus downgrades.
“We forecast 2025’s guidance at mid-point will downgrade consensus EBITDA (core earnings) expectations by 12%,” RBC said.
Vale shares were down 0.4% in Sao Paulo late in Tuesday.
Vale also said it expects to produce 340,000 to 370,000 tons of copper in 2025, from about 345,000 tons this year.
Vale’s copper production is expected to reach 350,000 to 380,000 tons in 2026, 420,000 to 500,000 tons in 2030, and about 700,000 tons in 2035.
Nickel production, meanwhile, is seen rising from around 160,000 tons this year to between 160,000 and 175,000 tons next year, 175,000 to 210,000 tons in 2026, and 210,000 to 250,000 tons in 2030, Vale added in a securities filing.
Vale also said its sees its capex totalling about $6.1 billion this year, and around $6.5 billion in 2025 and beyond.
(By Gabriel Araujo; Editing by Louise Heavens, Chizu Nomiyama, Alexander Smith and Jonathan Oatis)
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