Vale indicates increased iron ore production in 2022

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Vale indicates increased iron ore production in 2022

The mining company Vale expects to produce between 320 million and 335 million tons of iron ore in 2022, indicating an increase in production compared to 2021 at best, according to projections released this Monday (30) during the event with investors in New York.

For 2021, the production estimate was revised this Monday (30) to 315-320 million tons. Previously, the target for this year was 315 million to 335 million tons.

Even so, the company will again increase production this year, after falling in 2020 with the contribution of several mine stoppages that underwent safety reviews after the rupture of a dam in Brumadinho (MG) in January 2019.

Last year, the company’s production was 300.4 million tons, against almost 302 million in 2019.

“We are committed to bringing capacity back to 400 million tonnes, it is important to have full capacity as efficiently as possible,” said Executive Vice President of Ferrous, Marcello Spinelli.

“Value is our mantra, we are not going to produce without the need for a market, we are not going to deliver anything without the necessary quality. So let’s follow our strategy.”

The company plans to reach a production capacity of 370 million tonnes of iron ore by the end of 2022, against 341 million this year. In addition, it projected to reach a capacity of 400 million tons in the medium term and 400-450 million tons in the long term.

According to Spinelli, the company’s “value over volume” approach will continue to define production and sales strategy. As part of this strategy, the mining company has been working on mixing lesser quality ore, in old mines in Minas Gerais, with a higher content product and less contaminants, extracted in Pará.

The Northern System, where Vale’s largest mine is located (S11D), should account for 215 million tons of capacity in the medium term and 240-260 million tons in the long term.

The company also forecasts an increase in its premiums due to decarbonization initiatives and portfolio improvements to US$8 (R$44) to US$12 (R$67) per ton between 2023 and 2026 and from US$12 to US$ 18 (BRL 101) for over 2029, against $6 (BRL 33) in 2021.

The company’s production of iron ore pellets, in turn, is expected to reach 34 million to 38 million tons in 2022, the company said, versus 29.7 million in 2020 and 41.8 million in 2019. onwards, pellet production is expected to be over 50 million tons.

The company also plans to reduce costs by $1bn (BRL5.6bn) over the next two years, taking into account $750m (BRL4.2m) in fixed cost savings and the rest with investment efficiency. maintenance.

Base Metals

On the base metals side, Vale estimates production of 330-335 thousand tons of copper in 2022, against 295-300 thousand this year. For between 2023 and 2026, the projection is 390-420 million tons and after 2027, above 450 thousand tons.

In the case of nickel, production should reach 175-190 thousand tons between 2022 and 2023 and more than 200 thousand tons after 2024. For 2021, the forecast is to stay in the range 165-170 thousand tons.

The numbers compare to a copper production of 360.1 thousand tons in 2020 and a nickel production of 214.7 thousand tons.

“We recognize that 2021 has been a difficult year,” said Executive Vice President Base Metals Mark Travers.

Throughout the year, there was a comprehensive security and strategy review; maintenance delays at Sossego due to restrictions related to Covid-19; maintenance activities at the Sossego mill and the Onça Puma kiln; two months of interruption of work in Sudbury and delays in scheduled maintenance due to stoppage at the Canadian plant.

Social and Security Goals

As it has been since the rupture of the dam in Brumadinho, the president of the mining company, Eduardo Bartolomeo, opened the presentation highlighting repair work, people and security.

“We will never forget Brumadinho”, emphasized the executive, when detailing what has been done in these areas. So far, the company has already eliminated seven dams with an upstream construction method, the same used in the structure that collapsed in Brumadinho. Another 23 must be eliminated by 2035.

The company has also been working on several fronts to reduce the use of dams, with the adoption of dry processing of the commodity, in addition to other initiatives.

During the meeting with analysts and investors, Vale also presented its social ambition of being a partner in the development of autonomous communities, engaged in issues relevant to humanity and committed to sustainable mining.

To achieve this goal, the company defined three social goals for 2030: to be among the three companies in the sector best positioned in social requirements; lift 500,000 people out of extreme poverty; and collaborate with indigenous communities neighboring all of its operations in the development and execution of their plans to pursue the rights enshrined in the UN Declaration on the Rights of Indigenous Peoples.

“Vale wants to contribute to greater social justice through projects in the areas of education, health and income generation,” said the company.

“In addition, the company wants to contribute to the appreciation of cultures and the respect and promotion of the rights of indigenous peoples and traditional communities.”

The company also anticipated in five years, to 2025, the goal of reaching 26% female participation in the workforce. Currently, the percentage of women at Vale is 18.7%, compared to 13.5% in 2019, when the company established a target for women within a global diversity strategy.

In addition, Vale announced that it intends to reach 40% of black employees in leadership roles in Brazil by 2026, compared to 29%, a number registered after carrying out a self-declared census carried out this year with employees.

Additional reporting by Roberto Samora

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