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.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.