Brazilian mining giant Vale has cut its forecast for iron ore production to 300-305mn mt, compared to predictions of at least 310mn mt earlier this year.
After the outbreak of the COVID-19 pandemic, the miner cut its iron ore fines guidance from 340-355mn mt. Seemingly, the pandemic caused a greater impact on production than initially predicted. For 2021, Vale has set its guidance for the material at 315-335mn mt.
Market participants have hinted that the 2021 forecast is much lower than expected as Vale goes into the next year with a proven capacity of 318mn mt. However, Marcello Spinelli, head of ferrous metals at Vale, said that this is a conservative number, reached after taking maintenance and other operational conditions such as rain into consideration.
The miner also plans to cut down its emissions by 15pc and find partners which use its iron ore fines in an environmental-friendly manner, leading to a sustainable steel market. In this way, Vale plans to increase its high-quality products share to 90pc by 2024.
The company expects its total capex for 2021 at $4.2bn, of which only $500mn has been invested in expansion plans as $3.7bn was spent on maintenance of various projects this year. Regarding the Brumadinho tailings dam case that the company is fighting against the Brazilian government, Vale will set $670mn aside for this purpose from its Q4 2020 earnings, taking the total provisions for this case to $2.7bn. Vale’s chief financial officer, Luciano Siani, expects the final agreement to be closer to $3.6bn.