Vale updates production and cost forecasts for 2020 and 2021

On Wednesday, November 2, Vale released an update of production and cost estimates for 2020 and 2021. In a report to the market, the company announced that the estimate of iron ore production in 2020 will be in the range of 300 -305 million tons. For 2021, the estimate is from 315 to 335 million tons.

Regarding copper, the mining company announced a production forecast of 390,000 tons in 2021. The average estimate for the period 2022-2024 would be 455,000 tons. In 2025, copper production is expected to be around 500,000 tons.

The average nickel production should be 200,000 tons between 2021 and 2023, with a projection of 220,000 tons between 2024 and 2025.

In a presentation to investors on the New York Stock Exchange at the end of last year, the company forecast iron ore production at between 340-355 million tons for 2020.

Investments

Vale intends to invest US$ 5.8 billion in 2021, according to the projections released by the company. US$ 4.8 billion refers to maintenance and US$ 1 billion to expansion projects.

For 2020, the mining company maintained its investment projection at US$ 4.2 billion. The average investment for the coming years will be US$ 5.5 billion.

Costs

Vale also announced that the cash cost for iron ore was US$ 13.60 per ton in 2020. The mining company also said that when production reaches 400 million tons per year, the cash cost will be between US$ 10.50  – US$12.00 per ton.

Provision to de-characterize dams

Vale also announced that it will make an additional provision of US$ 670 million (nominal value) for the execution of the dam de-characterization plan in the fourth quarter’s financial statements.

The mining company estimates that by the end of 2020, provisions will reach US$ 2.7 billion. This amount, says Vale, is subject to review based on disbursements made until the end of the year.

Source: Valor Econômico

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