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Vale's Iron Ore Production and Sales in Q3 2019 Results

Mining News - Published on Wed, 16 Oct 2019

Image Source: steelguru.com
Vale's iron ore fines production3 reached 86.7 million tonnes in 3Q 2019, 35.4% higher than in 2Q19 and 17.4% lower than in 3Q18, mainly as a result of the resumption of Brucutu operations in June and the improvement in operational performance in the Northern System, which was impacted by unusual weather-related conditions in 2Q 2019. As previously announced, the National Mining Agency authorized the partial resumption of the dry processing operations at the Vargem Grande Complex. The above-mentioned decision will enable 5 Mt of additional production in 2019, equivalent to 12 million tonnes on an annualized basis.

For 2020, Vale expects to produce an additional 30 million tonnes from the halted operations related to the Brumadinho tragedy, with 7 million tonnes coming from the resumption of the dry processing operations at the Vargem Grande Complex in 2019 and the remaining from Fabrica, Timbopeba dry processing operations and others. For 2021, Vale expects to add the remaining production of 25 million tonnes, mainly coming from wet processing operations at Timbopeba and Vargem Grande Complex including third party purchases, run -of-mine and feed for pelletizing plants. Sales volumes of iron ore and pellets totaled 85.1 million tonnes, 20.2% higher than in 2Q19, due to the above mentioned production resumption and operational improvements at Ponta da Madeira port operations, which were impacted by abnormal rains in 2Q19.

Northern System - The Northern System, which is comprised of the Carajas and S11D mines, produced 55.4 million tonnes in 3Q19, 13.8 million tonnes and 1.5 million tonnes higher than in 2Q19 and 3Q18, respectively, mainly due to strong operational performance, achieving a production record of 20.4 million tonnes in 3Q19 in S11D.

Southeastern System - The Southeastern System, which encompasses the Itabira, Minas Centrais and Mariana mining hubs, produced 20.7 million tonnes in 3Q19, 4.8 million tonnes higher than in 2Q19, mainly due to the resumption of Brucutu operations in June, and 7.3 million tonnes lower than in 3Q18, mainly due to stoppage at the Alegria and Timbopeba operations in 1Q19. At the Mariana Complex, the stoppage was mainly due to Public Civil Actions, which suspended activities on Doutor and Campo Grande dams and ultimately halted operations at Timbopeba and Alegria. Since then, Vale: (i) entered into an agreement with the Public Prosecutors about steps towards resuming production; (ii) submitted a technical report to ANM to resume operations at Alegria mine; and (iii) is planning the construction of a tailings pipeline from the plant to the Timbopeba pit. The resumption of operations at both Alegria and Timbopeba mines is expected by 2020.

Southern System - The Southern System, which encompasses the Paraopeba and Vargem Grande mining hubs, produced 9.8 million tonnes in 3Q19, 3.6 million tonnes higher than in 2Q19, mainly due to a partial return of dry processing production in the Vargem Grande complex, and 12.6 Mt lower than in 3Q18, mainly due to stoppage at the Corrego do Feijao, Fabrica and Vargem Grande complex operations. At the Vargem Grande Complex, the stoppage was mainly due to an interdiction by ANM6 and Public Civil Actions, which stopped activities at the following dams: Maravilhas II, Dique III, Vargem Grande, Capitao do Mato and Dique B. Since then, Vale: (i) increased the safety factor of Vargem Grande dam, lowering the emergency level from 2 to 1; and (ii) initiated period of tests on the mine activities. Following that, part of the dry processing operations was resumed7. As well, on October 2nd, ANM approved testing at the TFA Rail Terminal, an important step towards debottlenecking the Vargem Grande Complex logistics. The TFA and Vargem Grande pelletizing plant are expected to have operations resumed within 6 months. The resumption of the remaining 20Mt is expected within 2 years.

At the Paraopeba Complex, the stoppage at Fabrica was mainly due to the interdiction by ANM of Forquilha I and III dams and Forquilha II and Grupo dams9, as well as Public Civil Actions which stopped any operation that could increase the dams’ risk. Since then, Vale: (i) entered into an agreement with the Public Prosecutors about steps towards resuming production; (ii) requested trigger tests to ANM to resume operations; and (iii) initiated the construction of a containment structure to protect the Self-Saving Zone 10 , with completion by 1H20. The resumption of operations at Fabrica is expected by 2020.

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Posted By : Rabi Wangkhem on Wed, 16 Oct 2019
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