Brazil: Vale's iron ore production falls 6%, y-o-y, in Q1CY'22, guidance intact

Brazilian miner Vale recorded total iron ore production at 63.93 million tonnes (mnt) in Q1CY'22, down 22% as against 82.47 mnt in Q4CY'21. The q-o-q fall-off is largely explained by licensing delays in Serra Norte, higher jaspilite waste occurrence in the ore body coupled with the tie-in effect of the installation of two primary crushers.

Furthermore, decrease in production from the Southern System resulted due to heavy rains in Jan with lower run of mine (ROM) availability in Mutuca.

On a yearly basis, output decreased by 6% compared to 68 mnt in Q1CY'21.

Pellet output down 24% q-o-q: Total pellet output was recorded at 6.92 mnt in Q1CY'22, down 24% q-o-q compared to 9.07 mnt in Q4CY'21. On a yearly basis, the output increased by 10% as against 6.3 mnt. Pellet production rose due to higher performance of the company's Oman plant as a result of less maintenance activities carried out during the period.

Iron ore, pellet sales down

Iron ore and pellet sales decreased by 35% to 60.61 mnt in Q1CY'22 as against 93.5 mnt in Q4CY'21 . Of this, iron ore sales comprised 53.6 mnt (down 36% q-o-q) and pellet sales were at 7.01 mnt (down 32% q-o-q).

Key updates

• Vale expects to start the raising works of the Itabirucu dam in Apr and the first stages of the raising should be completed by Q4CY'22, which should allow for capacity expansion in the Itabira complex and its pellet feed production.
  
  
• Brucutu's tailings filtration plant was commissioned in Apr and Vale expects to start up the Torto dam by the end of 2022. The achievement of Brucutu's full capacity also depends on the continuous licensing and preparation of areas to receive dry tailings and mining waste.
  
  
• Vale's iron ore production guidance remains stable at 320-335 mnt for CY'22.
  
  
• Pellet production guidance for CY'22 has been set at 34-38 mnt.