Production and sales in 4Q18
Production and sales in 4Q18
Rupture of Brumadinho Dam I
Since the first days following the rupture of the Dam I, Vale's initiatives have had four main purposes: (i) assistance to the affected people and recovery of the area affected by the rupture of the Dam I; (ii) determination of the causes of the rupture of the Dam I; (iii) ensure the safety of our existing upstream structures and of the communities nearby; and (iv) acceleration of the decommissioning or de-characterization process of our remaining upstream dams.
We will provide details about all those initiatives in the "Report from Administration" that will be published on March 27th, 2019.
Production and sales in 4Q18 and 2018
Vale iron ore fines production totaled 101.0 Mt in 4Q18 and 384.6 Mt in 2018, in line with its production guidance. In 2018, Vale's product portfolio Fe content reached 64.1%, alumina 1.2% and silica 3.9%.
On a quarterly basis, iron ore production totaled 101.0 Mt in 4Q18, 3.8% lower than in 3Q18 due to the usual weather-related seasonality. Vale quarterly pellet production totaled 15.8 Mt mainly due to the ramp-up of the Tubarão I, Tubarão II and São Luis pellet plants. The annual production of 55.3 Mt in 2018 was in line with the production guidance.
Iron ore fines and pellet sales volume was 96.5 Mt in 4Q18, with sales volumes of iron ore fines reaching 80.2 Mt, 3.9% lower than in 3Q18, as a result of sales that were deliberately postponed to 1Q19 for margin optimization purposes. Vale's pellet sales reached 16.0 Mt in 4Q18, due to the above-mentioned pellet plant ramp-ups and to commercial initiatives to use occasional excess of pellet feed production that was transformed into pellets using third party capacity.
As a result, the share of premium products in total sales was 84% in 4Q18 and averaged 82% in 2018. Iron ore fines and pellet quality premiums reached US$ 11.5/t in 4Q18 vs. US$ 11.0/t in 3Q18.
The nickel business transitioned to a smaller footprint in 2018 by adjusting investments and production to reflect current market conditions. Thompson transitioned to a mine-mill operation and Voisey's Bay production was adjusted to match the current mine life to the Voisey's Bay Mine Expansion project.
Production was also impacted by the corrective maintenance of the shaft at the Coleman mine in 1Q18. Consequently, production of finished nickel totaled 244,600 t in 2018, 15.1% lower than in 2017.
Copper production reached 395,500 t in 2018, 9.8% lower than in 2017, mainly reflecting Vale's strategic decision to reduce its nickel production profile, leading to lower copper by-product from the North Atlantic operations.
Coal production remained practically in line with 2017 as operations faced some bottlenecks, which were augmented by heavy rains during 1Q18. As a response, the Coal business reviewed its business plan and is implementing initiatives to achieve a sustainable and reliable ramp-up from 2019 onwards through the development of mine capacity, higher mine productivity and higher plant yields.
However, planned production is estimated to total 6,5 Mt in 1H19 as per the budget approved in 2018, despite the increase in total tons moved, as a result of lower ROM grade quality of the mine sections being opened.
For further information, click here to find the complete report.
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