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Vale's CFO says the miner will put caution before capacity as it aims to move forward with its recovery from the deadly 2019 dam catastrophe in the iron ore market
Miner Vale will be careful with capacity as it seeks to avoid a slump in the iron ore market and presses ahead with its recovery from a deadly dam failure in 2019.
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In an interview during the Reuters Commodity Trading Summit, Luciano Siani, Vale's chief financial officer, said the miner is prepared to increase its capacity using safer and less polluting methods to 450 million tons in about five years - almost 50 percent more. than production forecast for 2020.
Vale's CFO says the company will be more responsible in the coming years in the market
“We will be responsible and not overload the markets with iron ore,” he adds, saying the miner would not use full capacity if an expected rise in Asian demand driven by manufacturing did not materialise.
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“The intention is not to oversupply the markets for 450 (million tons). It means having available capacity to serve the market if necessary”, explains Siani.
As the only global iron ore miner with substantial capacity expansion plans, Vale's production decisions affect the prices of steel products around the world. Its path to growth includes new mines in northern Brazil, as well as restarting production at some of its oldest mines in the country's traditional mining heartland, Minas Gerais.
Leader in the global market as the largest producer of iron ore
In the third quarter of this year, the mining company briefly regained its status as the largest global producer after increasing production slightly above its Australian competitor, Rio Tinto, points out the Reuters report.
The Australian company overtook Vale after a deadly dam burst in the town of Brumadinho in 2019 left 270 people dead and forced the Brazilian miner to close other risky dams containing mining waste.
“Everyone understands that the biggest factor in supply fluctuations is Vale,” says Siani. “The good news is the capacity is here, the mines are here, the processing plants are here, the railroads are here.”
