Vale SA (ADR) (NYSE:VALE), a Brazilian miner announced on Thursday February 16 it produced a record 349 million tonnes of iron in 2016. This is way above the company’s own target. The impressive performance is attributed to strong performance at the northern Brazil mines and the successful start of the newly inaugurated S11D mine.
Vale, the world’s number one producer of iron ore and one of the top Nasdaq Stocks had set its production target at a range of between 340 to 350 million tones. The mining giant did produce 92.4 million tonnes of iron in the fourth quarter, representing a 4.5% increase from the same time the previous year. Production for the whole year rose by 1% as compared to the previous year.
Vale says it had continued to stop or cut on the production of higher cost tonnes its mines located in the southeastern state of Minas Gerais. This helped the company offset cheaper southeastern state of Minas Gerais production in the northern parts of Brazil where production costs are very low and the output is of high quality. The newly started S11D is the company’s largest mine and is situated in the Amazon near the company’s other mine deposits in the northern state of Para.
The company has maintained the 2017 production projections at 360-380 million tones noting that the company projects to reach an annual production target rate of 400 million tonnes by the year 2018.
Vale also recorded 311,000 tonnes in nickel production in 2016. This represents a 7% increase compared to the previous year. This increase is attributed to the impressive performance the company’s plant in New Caledonia and Canada.
The Rio de Janeiro-based company has commenced shipment of the low-cost S11D after successfully investing $14 billion. As the new mines continue to grow, the company hopes it will help in reducing the overall production costs. This is in a move to counter competition poised by Rio Tinto plc (ADR) (NYSE:RIO), another Nasdaq Stocks listed company and BHP whose mines in Australia are very close to Chinese steel mines