Vale 2017 iron ore production update
Vale announced that iron ore production achieved a record of 366.5 million tonne in 2017, 5.1% higher than in 2016 mainly due to the S11D ramp-up, which is advancing according to plan, and higher production in the Conceição I plant in the Southeastern System due to the conclusion of its ramp-up in 2016.
The annual production of iron ore was within the original guidance of 360-380 million tonne, being closer to the lower end of the range, mainly due to the reduction of production of iron ore with high silica content from the Southern and Southeastern Systems, in line with the ongoing strategy to maximize margins.
Vale reaffirms its production guidance for 2018 of around 390 million tonne, as previously announced on Vale Day.
The Northern System achieved a production record of 169.2 million tonne in 2017, 14.2% higher than in 2016, due to the S11D mine and plant ramp-up.
Vale’s Global Recovery rate 3 increased from 46% in 2015 to 50% in 2016 and now to 51% in 2017, as a result of the continuous improvement in productivity.
Iron ore and pellets shipments from Brazil totaled 335.5 million tonne in 2017, 34.2 million tonne and 17.1 million tonne higher than in 2015 and 2016, respectively, mainly due to higher production in the Northern System.
Blended volumes in Asia totaled 66.2 Mt in 2017, 48.1 million tonne and 24.9 million tonne higher than in 2015 and 2016, respectively.
Sales volumes of iron ore and pellets reached 343.1 million tonne in 2017, remaining practically in line with 2016, but with improvements in the portfolio mix. In 4Q17, some sales were deliberately postponed to 1Q18 for margin optimization purposes.
On a quarterly basis, Vale’s 4Q17 iron ore production reached 93.4 million tonne, 1.8% lower than in 3Q17 due to the seasonal weather conditions in the Southeastern and Southern Systems and 1.1% higher than in 4Q16 due to the S11D ramp-up in the Northern System which more than offset the reduction in lower grade ore production from the Southern and Southeastern Systems.
Average Fe content was 64.3% in 4Q17, slightly higher than the 64.1% in 3Q17 mainly due to the S11D ramp-up and the reduction in lower grade ore production aligned with the ongoing strategy to maximize margin.
Northern System
The Northern System, which comprises Carajás, Serra Leste and S11D, achieved a production record of 46.7 Mt in 4Q17, 15.0% and 3.7% higher than in 3Q17 and 4Q16, respectively, mainly due to the ramp-up of S11D, which is advancing according to plan.
Southeastern System
The Southeastern System, which encompasses the Itabira, Minas Centrais and Mariana mining hubs, produced 26.0 Mt in 4Q17, 3.2% Mt lower than in 3Q17 mainly due to Vale’s actions to reduce supply of lower grade and high silica material, as well as weather-related seasonality and 6.3% lower Mt than in 4Q16 due to the curtailment of lower grade ores production.
Southern System
The Southern System, which encompasses the Paraopeba, Vargem Grande and Minas Itabirito mining hubs, produced 20.0 Mt in 4Q17, 11.2% lower than in 3Q17 mainly due to Vale’s actions to reduce supply of lower grade and high silica material, as well as weather-related seasonality and 14.6% lower than in 4Q16 due to the curtailment of lower grade ore production.
Midwestern System
The Midwestern System, which encompasses the Urucum and the Corumbá mines, produced 0.6 Mt in 4Q17, in line with 3Q17 and 4Q16.
Source : Strategic Research Institute