Vale Refreshes Iron Ore Quarterly Output High in Q3 2017

SHANGHAI, Oct. 20 (SMM) - Vale S.A. (Vale) iron ore production [1] achieved a quarterly record of 95.1 Mt in 3Q17, 3.3 Mt higher than in 2Q17, mainly due to the better operational performance in the Northern System and the S11D ramp-up, the company said in an e-mail to SMM. 

The Northern System, which comprises Carajás, Serra Leste and S11D, achieved a quarterly record of 45.0 Mt in 3Q17, 8.5% and 16.4% higher than in 2Q17 and 3Q16, respectively, mainly due to the ramp-up of S11D, which is advancing according to plan, plus better operational performance in the mine and plant at Carajás and the weather-related seasonality.
 
Sales volumes for 3Q17 were lower than the production volumes, implying a slight inventory build-up as a result of operational needs and market strategies. However, the sales/production volume ratio were higher than in 2Q17.
 
As announced in the 2Q17 Production Report, production of ore with high silica content from the Southern and Southeastern Systems was reduced by an annualized rate of 19 Mt.
 
Production will therefore be within the lower end of the 360-380 Mt guidance range for 2017, in line with the ongoing strategy to maximize margins. Vale reaffirms its long-term base case target of 400 Mt of total production per year.
 
The average Fe content was 64.1% in 3Q17, slightly higher than the 63.8% in 2Q17. The increase results from the curtailment of high silica products and Vale's strategy to improve iron ore price realization.
 
Nickel production reached 72,700 t in 3Q17, 10.2% higher than in 2Q17, mainly due to Sudbury furnace #2 returning to production in July, strong production performance in Thompson and the steady performance at Onça Puma. In mid-September, Sudbury transitioned to the new single furnace flowsheet and commenced operating as a single furnace operation.
 
Production at the Long Harbour processing plant reached a record of 8,300 t in 3Q17, 118.4% higher than the 3,800 t recorded in 3Q16 due to the production ramp-up. In July, the refinery successfully reached 75% of monthly nameplate capacity.
 
Production of finished products from VNC reached 10,100 t in 3Q17, 12.2% higher than in 2Q17 and 36.5% higher than in 3Q16.
 
Copper production [2] reached 116,900 t in 3Q17, 16.0% higher than in 2Q17 and 7.0% higher than in 3Q16, mainly due to the record quarterly production in Salobo and higher production in Sudbury, as it returned to regular operation after a scheduled maintenance shutdown in 2Q17.
 
Coal production in Mozambique reached a quarterly record of 3.2 Mt in 3Q17, 5.8% and 38.3% higher than in 2Q17 and 3Q16, respectively, as a result of the better performance of the two Coal Handling and Preparation Plants (CHPP1 and CHPP2). CHPP2 reached a new monthly production record of 566 kt in July, as a result of its continuing ramp-up. The share of metallurgical coal was 58% of overall production, due to a combination of the geological characteristics of the feed plus the continued optimization of the CHPPs. We expect the share of metallurgical coal to return to 60%-65% of overall production. Logistics operations in Mozambique reached all-time records, with railed volume [3] reaching 3.5 Mt in 3Q17, 15% higher than in 2Q17.

1 Including iron ore acquired from third parties.
2 Excluding Lubambe's attributable production.
3 Includes Sena-Beira and Nacala logistics corridors.

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