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Mar.29.2024 1USD=7.095RMB
  SteelHome >>Raw Material>>Market Info>>International Dynamics
 
Vale's 3Q2020 Iron Ore Fines Production Up 2.3% YoY to 88.7Mlnt

https://en.steelhome.com [SteelHome] 2020-10-20 14:12:25

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Rio de Janeiro, October 19th, 2020 – Vale S.A. (“Vale”) is evolving with its stabilization plan and delivered a strong iron ore production in 3Q20. Nickel and Copper businesses managed to recover productivity for a solid start in 4Q20, after normalizing routine maintenance in the quarter. Results were enabled by the workforce commitment to the company’s safety standards and strict operational discipline, following the continuous implementation of the Vale Production System (VPS).

Vale’s iron ore fines production totalled 88.7 Mt, an increase of 21.1 Mt compared to the previous quarter. The production record of 56.9 Mt in a quarter was reached in the Northern System, with August as the best month with 19.7 Mt. S11D had a record production in September, with 8.3Mt, and in the quarter, with 24.4 Mt.

The Southern and Southeastern Systems overall performance improved across operating units, notably in the Itabira Complex and Timbopeba site (running for a full quarter given the resumption in June) and with the resumption of operations at Fazendão mine in July.

Iron ore production was maintained at around 1 Mtpd after mid-July, showing consistency and stability throughout almost the entire quarter. Operations have achieved increased rates and stability with safety, based on the progressive implementation of the VPS and measures like the Safe Work Permission (PTS), which are essential to transform Vale’s culture into one driven to safety and operational excellence. All operations were also favoured by regular weather conditions for the period.

Vale’s pellet production totalled 8.6 Mt in 3Q20, up 21.1%, mainly due to higher availability of pellet feed, especially from the Itabira Complex, and improved operational performance at the  pelletizing plants.

Sales volumes of iron ore fines and pellets, with a premium of US$ 4.6/t3, reached 74.2 Mt in 3Q20, an increase of 20.4%. The logistics lead time between production and CFR sales started to normalize in September, as Vale was transiting inventories across its supply chain, with total sales of 28.6 Mt, and the performance is expected to improve even further in 4Q20, subject to Vale’s approach based on margin maximization, prioritizing blended products in the company’s portfolio.

T1: Production summary

000’ metric tons

3Q20

2Q20

3Q19

9M20

9M19

% change

3Q20/2Q20

3Q20/3Q19

9M20/9M19

Iron ore1

88,676

67,598

86,704

215,877

223,628

31.2%

2.3%

-3.5%

Pellets

8,562

7,070

11,133

22,559

32,378

21.1%

-23.1%

-29.5%

1. Including third party purchases, run-of-mine and feed for pelletizing plants.            

T2: Sales summary

000’ metric tons

3Q20

2Q20

3Q19

9M20

9M19

% change

3Q20/2Q20

3Q20/3Q19

9M20/9M19

Iron ore

65,769

54,615

74,039

172,040

191,400

20.4%

-11.2%

-10.1%

Pellets

8,464

6,950

11,077

22,725

32,233

21.8%

-23.6%

-29.5%

T3: Iron Ore Production & Sales by Mines

000’ metric tons

3Q20

2Q20

3Q19

9M20

9M19

% change

3Q20/2Q20

3Q20/3Q19

9M20/9M19

Northern System

56,850

42,463

55,401

139,213

137,992

33.9%

2.6%

0.9%

Serra Norte and Serra Leste

32,459

24,319

35,047

78,258

83,914

33.5%

-7.4%

-6.7%

S11D

24,391

18,144

20,354

60,955

54,078

34.4%

19.8%

12.7%

Southeastern System

16,307

12,721

20,695

40,817

56,129

28.2%

-21.2%

-27.3%

Itabira (Cauê, Conceição and others)

6,465

5,324

9,836

17,796

27,902

21.4%

-34.3%

-36.2%

Minas Centrais (Brucutu and others)

4,394

4,190

8,849

12,233

19,283

4.9%

-50.3%

-36.6%

Mariana (Alegria, Timbopeba and others)

5,448

3,207

2,010

10,788

8,944

69.9%

171.0%

20.6%

Southern System

14,930

11,768

9,806

34,054

27,753

26.9%

52.3%

22.7%

Paraopeba (Mutuca, Fábrica and others)

7,064

5,873

7,109

16,585

19,640

20.3%

-0.6%

-15.6%

Vargem Grande (Vargem Grande, Pico and others)

7,866

5,895

2,697

17,469

8,113

33.4%

191.7%

115.3%

Midwestern System

589

645

802

1,793

1,754

-8.7%

-26.6%

2.2%

Corumbá

589

645

802

1,793

1,754

-8.7%

-26.6%

2.2%

IRON ORE PRODUCTION1

88,676

67,598

86,704

215,877

223,628

31.2%

2.3%

-3.5%

IRON ORE SALES2

65,769

54,615

74,039

172,040

191,400

20.4%

-11.2%

-10.1%

IRON ORE AND PELLETS SALES

74,233

61,565

85,116

194,765

223,633

20.6%

-12.8%

-12.9%

1. Including third party purchases, run-of-mine and feed for pelletizing plants. 

2. Including third party purchases and run-of-mine.

Northern System

The Northern System, which is comprised of Serra Norte, Serra Leste and S11D mines, produced 56.9 Mt in 3Q20, a record level for a quarter, mainly due to (i) a strong and record

performance of S11D, (ii) a 15-day maintenance in June and July in Serra Norte, which, despite the production losses in the beginning of the quarter, permitted the increase of site’s productivity, and (iii) better weather in the region, with lower rainfall levels4, guaranteeing more stability in production.

The license and permit necessary to resume operations of Serra Leste are expected to be granted shortly and, after that, maintenances will be carried out to safely resume operations until the end of 2020. Serra Leste operations have been halted since January 2019 and its resumption will add up to 6 Mtpy of production capacity.

Southeastern System

The Southeastern System, which encompasses the Itabira, Minas Centrais and Mariana mining hubs, achieved a solid production of 16.3 Mt in 3Q20, despite the restrictions related to tailings disposal, limiting sites’ capacity. The increased production level in the quarter was mainly due to (i) the absence of COVID-19-related impacts, which caused a temporary stoppage of 12-day of Itabira Complex in June and 1 Mt of production loss, (ii) Timbopeba site operations, which restarted in June with 4 Mtpy capacity running in a full quarter, (iii) the resumption of Fazendão mine operations in July, after the granting of license to expand the mining area on the site, and (iv) usual weather-related seasonality.

Southern System

The Southern System, which encompasses the Paraopeba and Vargem Grande mining hubs, produced 14.9 Mt in 3Q20. The increase of production compared with 2Q20 was achieved mainly due to (i) higher production in Vargem Grande complex, after the partial resumption of wet processing production in 2Q20 with tailings filtration, using the Maravilhas I dam and Cianita waste dump as a preliminary solution for tailings disposal, and (ii) seasonally higher third-party purchases.

Operational stabilization and resumption plan

As presented in the 2020 Analyst and Investor Tour presentation, Vale has a set of solutions and new assets for unlocking and resuming capacities in its sites, which are under implementation in collaboration with the National Mining Agency (ANM), the Public Prosecutor’s Office of the Minas Gerais State (MPMG) and the external audit firms.

 

Actions in progress

Accomplishments in 3Q20

Timeline for resumption

 

 

 

 

 

 

 

 

Northern System

·     Obtaining license and implementing maintenance works in Serra Leste.

·     Licensing and opening new mining fronts.

·     Progressing on the construction of Gelado, Northern System 240 Mtpy and Serra Sul 120 projects.

·      Northern System and S11D achieved a record production for a quarter.

·      Opening of new mining fronts in Morro 1 in progress increasing site’s productivity.

·      Approval of Serra Sul 120 project

·     4Q20: Resumption of Serra Leste operation, adding 6 Mtpy in capacity.

·     2020/23: Applying for new licenses and opening of new mining fronts such as Morro 1 and N3.

·     2020/21: Installation of new crushers to process jaspilite ore bodies in S11D.

·     2021/23: Usina 1 shift to 100% dry processing temporarily impacting production.

·     1H22: Start-up of Gelado project, increasing the System’s capacity by 10 Mtpy.

·     2H22: Start-up of Northern System 240 Mtpy project, increasing the System’s capacity by 10 Mtpy.

·     2023: Expansion of Serra Leste to 10 Mtpy capacity.

·     1H24: Start-up of Serra Sul 120 project.

 

 

Brucutu

·     Completion of Torto dam5 and tailings’ filtration plant construction to increase wet processing capacity.

·      Torto dam construction works achieved 93% of physical progress

·      Tailings’ filtration plant construction works achieved 31% of physical progress.

·     2Q21: Start-up of Torto dam, increasing site’s capacity to 28 Mtpy from current 11 Mtpy.

·     2022: Start-up of tailings’ filtering plant and dry stacking activities and use of Torto and Norte/Laranjeiras6 dams as contingency.

 

 

 

Itabira Complex

·     Completion of studies (geotechnical investigations) of Itabiruçu dam.

·     Restart raising construction works of Itabiruçu dam, after removal of emergency level.

·     Completion of tailings’ filtration plants construction to increase wet processing capacity.

·      Progressed on studies required by external auditors to remove the emergency level of Itabiruçu dam.

·      Tailings’ filtration plant construction works achieved 19% and 17% of physical progress in Cauê and Conceição, respectively.

·     1Q21: Removal of emergency level of Itabiruçu dam and start of raising construction.

·     2022: Start-up of tailings’ filtering plants and dry stacking activities7, increasing site’s capacity to 40 Mtpy from current 26 Mtpy.

 

 

 

Timbopeba

·     Application for a permanent authorization to dispose tailings at Timbopeba pit.

·     Project being concluded to adapt the plant’s capacity for tailings disposal at Timbopeba pit.

·      First full quarter of operation since the site was halted in Mar/19, achieving a run-rate of 5.1 Mtpy.

·      Progressed on studies required by National Mining Agency for the final use of the Timbopeba pit and on plant’s adaptation to increase capacity.

·     1Q21: Increase production capacity to 12 Mtpy from current 4 Mtpy fully disposing tailings at Timpopeba pit.

·     2023: Start-up of Capanema project8, adding 7 Mtpy of net capacity in the first years.

 

Actions in progress

Accomplishments in 3Q20

Timeline for resumption

 

 

 

 

 

 

Vargem Grande Complex

·     Completion of Maravilhas III dam9 and tailings’ filtration plant construction to increase wet processing capacity.

·     De-characterization of Vargem Grande dam.

·     Studies to debottleneck logistics capacity, limited by the impossibility to operate the long-distance conveyor belt in the segment close to the Vargem Grande dam and the use of autonomous train in Forquilhas and Grupo dams self-rescue zones (ZAS).

·      Maravilhas III dam construction works achieved 53% of physical progress.

·      Tailings’ filtration plant construction works achieved 79% of physical progress.

·      Forquilha I dam emergency level decreased to 2 from 3 in October.

·     2Q21: Start-up of Maravilhas III dam and tailings’ filtering plant increasing site’s production capacity to 30 Mtpy from current 27 Mtpy10 and resumption of VGR pellet plant, depending on market conditions.

·     2022: Unlock site’s conveyor belt capacity11 after progressing on VGR dam de-characterization and licensing of new mining areas, which today limit capacity at 30 Mtpy.

·     2020/27: Increase railway capacity, which today limits capacity at 36 Mtpy, advancing in studies to elevate automated train productivity and decreasing emergency levels of Forquilhas and Grupo dams12.

 

 

 

Fábrica

·     Conclusion of required vibration tests (to certify the absence of impacts on the site’s structures), depending on external assessment/approval.

·     Construction of pipeline for tailings disposal at Forquilha V dam.

·      TAS13 railway terminal operations resumed in July, after vibration tests, enabling inventory movement.

·      Approval received in October to start vibration tests in mines and crushing facilities.

·     1Q21: Conclusion of vibration tests.

·     2Q21: Site’s resumption with 6 Mtpy of production capacity, after concluding pipeline construction for tailings disposal at Forquilha V dam

·     3Q21: Resumption of Fábrica pellet plant, depending on market conditions.

Note:

5. A positive declaration of stability condition (DCE) and an operating license for Torto dam operations are necessary, relying on the external auditor and authorities’ assessment.

6. Norte/Laranjeiras dam is under Emergency Level 1 and today does not have a positive stability declaration, which is required to resume operations. The dam’s stability assessment and definition of necessary act ions is expected in 4Q20 and the use of the dam as contingency in 2025.

7. Using Itabiruçu dam as contingency.

8. Project with capacity of up to 18 Mtpy expected to be approved in 4Q20.

9. A positive declaration of stability condition (DCE) for Maravilhas III dam operations are necessary, relying on the external auditor’s assessment.

10. The start-up increases mine-plant capacity to 53 Mtpy.

11. Resumption of conveyor belt relies on external approvals by National Mining Agency (ANM) and external auditors.

12. Decrease of emergency levels also depends on external evaluation by ANM and external auditors.

13. TAS stands for Terminal de água Santa.

T4: Pellets Production & Sales by Mines

000’ metric tons

3Q20

2Q20

3Q19

9M20

9M19

% change

3Q20/2Q20

3Q20/3Q19

9M20/9M19

Northern System

1,176

919

1,090

2,978

2,846

28.0%

7.9%

4.6%

São Luis

1,176

919

1,090

2,978

2,846

28.0%

7.9%

4.6%

Southeastern System

4,906

3,537

7,628

13,575

21,468

38.7%

-35.7%

-36.8%

Tubarão 1 and 2

-

-

1,012

-

2,692

n.m.

-100.0%

-100.0%

Itabrasco (Tubarão 3)

821

455

868

2,164

2,183

80.4%

-5.4%

-0.9%

Hispanobras (Tubarão 4)

863

363

942

1,855

2,590

137.7%

-8.4%

-28.4%

Nibrasco (Tubarão 5 and 6)

1,007

842

2,042

3,074

6,009

19.6%

-50.7%

-48.8%

Kobrasco (Tubarão 7)

849

541

995

2,200

2,922

56.9%

-14.7%

-24.7%

Tubarão 8

1,366

1,336

1,769

4,283

5,072

2.2%

-22.8%

-15.6%

Southern System

-

129

-

129

1,069

-100.0%

n.m.

-87.9%

Fábrica

-

-

-

-

515

n.m.

n.m.

-100.0%

Vargem Grande

-

129

-

129

554

-100.0%

n.m.

-76.7%

Oman

2,480

2,485

2,415

5,877

6,841

-0.2%

2.7%

-14.1%

Others1

-

-

-

-

154

n.m.

n.m

-100.0%

PELLETS PRODUCTION

8,562

7,070

11,133

22,559

32,378

21.1%

-23.1%

-30.3%

PELLETS SALES

8,464

6,950

11,077

22,725

32,233

21.8%

-23.6%

-29.5%

1. Third party capacity utilization.

Production overview

Vale’s pellets production in 3Q20 was 21% higher than in 2Q20, mainly due to less maintenance stoppages and higher pellet feed availability, as a result of Timbopeba’s site resumption in June and the absence of COVID-19-related disruptions at the Itabira Complex.

More Info: VALE’S PRODUCTION AND SALES IN 3Q20


(To contact the reporter on this story: cody.wang@steelhome.cn or 86-555-2238837 18725550282)
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