Vale Claims It Will Do Everything to Prevent Decline in Iron Ore Market

The CFO of Vale States That the Miner Will Exercise Caution Before Capacity, As It Intends to Move Forward With Its Recovery of the Fatal 2019 Dam Disaster in the Iron Ore Market

The mining company Vale will be cautious about capacity as it seeks to avoid a downturn in the iron ore market and continues with its recovery from a fatal dam collapse in 2019.

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In an interview during the Reuters Commodity Trading Summit, Luciano Siani, Vale’s CFO, said that the miner is prepared to increase its capacity using safer and less polluting methods to 450 million tons in about five years – nearly 50 percent more than the production forecast for 2020.

CFO of Vale States That the Company Will Be More Responsible in the Coming Market Years

“We will be responsible and will not overload the markets with iron ore,” he added, stating that the miner would not use full capacity if an anticipated increase in Asian demand driven by manufacturing did not materialize.

“The intention is not to oversupply the markets for 450 (million tons). It is to have available capacity to meet the market if needed,” Siani explains.

As the only global iron ore miner with significant capacity expansion plans, Vale’s production decisions affect the prices of steel products worldwide. Its path to growth includes new mines in northern Brazil, as well as the reactivation of production at some of its older mines in the country’s traditional mining heartland, Minas Gerais.

Leader in the Global Market as the Largest Iron Ore Producer

In the third quarter of this year, the miner briefly regained its status as the largest global producer after increasing production slightly above its Australian competitor, Rio Tinto, according to a Reuters report.

The Australian company surpassed Vale after the burst of a fatal dam in the city of Brumadinho in 2019 left 270 people dead and forced the Brazilian miner to close other high-risk dams containing mining waste.

“Everyone understands that the big factor swinging supply is Vale,” Siani says. “The good news is that the capacity is here, the mines are here, the processing plants are here, the railways are here.”