Brazil's Vale Q1 output up vs year ago; issues at Itabira, S11D weigh

[RIO DE JANEIRO] Iron ore production at Brazil's Vale SA fell sharply in the first quarter on a sequential basis, but rose compared to the same period a year ago, buoyed by the ramp-up of multiple key mine complexes.

In a Monday securities filing, the company reported quarterly production of 68.045 million tonnes, up 14.2 per cent from the first quarter last year, but down 19.5 per cent from the fourth quarter.

The company said the improvement in yearly terms was due in part to rising production at its Timbopeba, Vargem Grande and Fabrica mines. Those complexes have undergone significant safety upgrades, following a dam collapse at a Vale-owned mine in 2019 in the town of Brumadinho, which killed 270 people.

Among the other factors that buoyed Vale's iron ore output in the period was a relatively dry January, as well as the late 2020 restart of its Serra Leste facility, which had been halted since the Brumadinho disaster.

Conversely, scheduled maintainence stoppages at its S11D mine in northern Brazil, regulatory restrictions at its Itabira mine and "habitual seasonality" weighed on production compared with the previous quarter, Vale said.

The company's official guidance for 2021 iron ore output is 315 to 335 million tonnes, meaning Vale will need to ramp up production significantly in coming quarters to meet its projections.

The company produced 76,500 tonnes of copper in the first quarter, down 19 per cent in annual terms and 18.2 per cent in quarterly terms, the company said.

Vale warned that copper production, which was hit by coronavirus-related restrictions, was likely to come in at the lower end of its prior forecast of 360,000 to 380,000 tonnes.

REUTERS