Vale to Double Exports to China Within Five Years
Mining behemoth Vale SA (NYSE: VALE) has announced plans to double its iron ore exports to China within the next five years.
According to Jose Carlos Martins, the company’s head of ferrous metals, the Brazilian company plans to export 400 million tons of iron ore a year by 2019, nearly 50 percent more than the 270 million tons it exported in 2013. Vale currently supplies 12 percent to 14 percent of China’s consumption of iron ore.
“We are hedged for a big volume, our needs are practically covered. If eventually we need something else, we go to the spot market,” Martins said. “Now, as we boost production volumes and we boost exporting volumes, we will need to hire more ships, that’s unavoidable.”
Vale, which operates the biggest iron-ore carriers in the world, is considering purchasing or hiring about 230 new crafts to ship larger volumes of iron to China. The country doesn’t allow Vale’s vessels to anchor at its ports over fears of the impact on supply and prices, has been utilizing transit centers in Africa and a distribution facility in the Philippines to deliver iron ore to its customers in China.
Vale is the world’s largest producer and export of iron ore, the main ingredient in steel.
Iron ore prices in China have averaged $108.82 a ton so far this year, which is the lowest it’s been since 2009. Brazil’s total iron ore exports in July rose 5 percent to 31.1 million mt, from 29.6 million mt in the year-ago period, according to the latest Brazil Ministry of Foreign Trade data.
Barrick profit beats expectations as copper, gold prices up
Barrick Gold has reported a 78% jump in first-quarter profit, beating analyst expectations thanks to rising gold and copper prices, and said it was on track to meet annual forecasts.
Production in the second half is expected to be higher than the first, the gold miner said, thanks in part to the ramp-up of underground mining at the Bulyanhulu mine in Tanzania and higher expected grades at Lumwana in Zambia, reports Reuters
Barrick’s first-quarter gold production fell to 1.10 million from 1.25 million ounces due partly to lower grades at its Pueblo Viejo mine in Dominican Republic.
Adjusted profit surged 78% to $507mn in the quarter ended March 31, from $285mn a year earlier, and Barrick announced a 9 cent per share quarterly dividend.
Stronger prices helped boost Barrick’s revenue from its copper mines in Chile, Saudi Arabia and Zambia by 31% from the fourth quarter. Overall earnings per share were $0.29, ahead of analysts’ estimate of $0.27.
“We expect a positive stock reaction to the earnings beat and strong cash flow,” said Credit Suisse analysts.
Potential for South Africa merger
Barrick CEO Mark Bristow, who has championed mergers across the gold industry, said he backed the idea of South Africa-listed miners Goldfields and AngloGold Ashanti combining.
Speculation has been swirling around the two companies and Sibanye-Stillwater, whose CEO Neal Froneman floated the idea of a three-way merger.
“I’m a South African, and this country has such a great mining history and it would be great to see a real gold business come out of the many failed discussions that we’ve seen,” said Bristow.
Goldfields declined to comment. In a statement, AngloGold Ashanti said it was focused on delivering on its growth plan to unlock value from its portfolio of gold assets.
Bristow also said he had met with the Democratic Republic of Congo’s new mines minister and other officials and was continuing to work on getting $900mn belonging to its Kibali mine joint venture out of the country.
“We have a solution, it just needs to be sanctioned by the appropriate authorities which haven’t been around for a while,” he said, referring to a recent government overhaul by President Felix Tshisekedi.