However, executives said that nickel would become an industry motor when electric vehicles become a reality.
Vale has struggled over its presence in the nickel segment, where prices have yet to pick up because of oversupply, despite the metal’s key role in lithium-ion batteries that are used in electric cars.
Over-budget and years late when it started up in 2010, the New Caledonia project, located on a Pacific island, accumulated nearly $1.3 billion in losses from 2014 to 2016.
In December, Vale dialed back nickel output forecasts for the following five years even as it praised the metal’s future prospects.
On Thursday, Vale said it was curbing base metal production to boost returns, though the world’s biggest nickel producer hopes the area will one day represent a greater part of earnings.
Vale, also the world’s largest iron ore producer, said it will not flood the market with ore from its Carajas mine, adding that the S11D mine would double production this year over last thanks to its continuing ramp-up.
First quarter earnings were hit by a slide in realized iron ore prices. However, Vale’s high quality ore is seen commanding strong demand in China, which aims to curb pollution fanned by making steel from lower quality ore.
(Reporting by Marta Nogueira and Alexandra Alper; Editing by Chizu Nomiyama and Phil Berlowitz)
