Brazil’s mining, shipping and terminal operating group Vale S.A. has noted that production of iron ore this year will only meet its lowest original forecast and that output in 2017 will also be lower than expected. This, it is suggested, is an indication that Vale is attempting to control output at its mines where the lowest margins are to be found.

In a report, the company noted that output in the second quarter reached 86.823mt (million tonnes), which is a decrease of 2.8% over the same period in 2015.

Trends in the first six months of the year suggest that output for 2016 will be in the region of 340mt to 350mt, which is close to the lowest initial forecasts released by the company. In 2015, Vale produced 345.9mt.

Company policy is to replace high cost tonnage, which should mean that in 2017 output will be below the original forecast targets of 380–400mt.

Barry Cross