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Released July 25, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Vale S.A. reported record iron ore production for second-quarter 2017, driven largely by significant progress at its Serra Sul (a.k.a. S11D) mine in Brazil. But the company's 91.85 million tonnes produced, almost half of which was in a single Brazilian state, may be contributing to a global glut in production that doesn't seem to be helping iron ore prices. Industrial Info is tracking more than $20 billion in active projects involving Vale.
Despite the record quarterly output, Vale predicts iron ore production would end 2017 near the bottom of its forecast of 360 million to 380 million tonnes, partly because it plans to cut high-silica ore production significantly in the second half of the year. Vale also will cut its output of nickel and other materials.
Vale's largest project under construction, the $7.9 billion railway and terminal expansion for the Serra Sul iron ore mine near Parauapebas City, Brazil, broke ground in mid-2013 and is set to wrap up late next year. In the first quarter of this year, Vale completed the $6.9 billion construction of the Serra Sul iron ore mine, which is expected to produce 75 million tons per year at its peak. Serra Sul, more commonly known as "S11D," is expected to push Vale past its top rival, Rio Tinto plc (NYSE:RIO) (London, England), in annual output. For more information, see Industrial Info's project reports on the rail/terminal expansion and the completed mine.
Serra Sul is now a key part of Vale's "northern system," which is in the Brazilian state of Para and includes the Carajás and Serra Leste mines. The system, which saw record production of 41.5 million tonnes during the quarter, is expected to drive total shipments of iron ore from Brazil as high as 480 million tons in 2020, up from 371 million tons in 2016. But the global market for iron ore already is seeing a glut, which has driven down prices for the material and likely will continue to do so. Late last month, Morgan Stanley (NYSE:MS) (New York, New York) slashed its price outlook for the material, according to Bloomberg, and it expects the global surplus to increase every year to 2021.
Vale slashed its nickel output forecast for 2017 from 317,000 tonnes to 295,000 tonnes, after the start of maintenance and reconstruction efforts at a furnace in Sudbury, Ontario, caused a 16% drop in the second quarter. Industrial Info is tracking the $1 billion replacement and expansion project at the Copper Cliff Nickel Mine in Sudbury, which is expected to wrap up late next year. At the same facility, the company is performing a $1 billion addition of an atmospheric emission reduction plant for the 500,000-tonne-per-year nickel smelter, which will reduce sulfur dioxide emissions to 20,000 tonnes per year.
Vale also is at work on $750 million in additions and expansions at the Voisey's Bay facility near Nain, Newfoundland and Labrador, which will add a 7,200-tonne-per-day nickel mine and expand the concentrator with a grinding circuit to produce 40,000 tonnes per year of nickel-in-concentrate. For more information, see Industrial Info's project reports on the Copper Cliff mine expansion and emission-reduction addition, and Voisey's Bay expansions.
Vale has been moving more of its facilities abroad recently, so as to respond more quickly to demand in Asia and other foreign markets. But the reduction in nickel output could hinder the $1 billion construction of the Pomalaa Nickel Refinery in Kolaka, Indonesia, which involves building a high-pressure acid-leaching line to produce 20,000 tonnes per year, but already has faced at least five years of delays. Vale also has proposed a $1 billion expansion that would double the output, but this would not be considered seriously until the first phase looks more certain. For more information, see Industrial Info's project reports on the proposed first phase and second phase of the Pomalaa refinery.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Despite the record quarterly output, Vale predicts iron ore production would end 2017 near the bottom of its forecast of 360 million to 380 million tonnes, partly because it plans to cut high-silica ore production significantly in the second half of the year. Vale also will cut its output of nickel and other materials.
Vale's largest project under construction, the $7.9 billion railway and terminal expansion for the Serra Sul iron ore mine near Parauapebas City, Brazil, broke ground in mid-2013 and is set to wrap up late next year. In the first quarter of this year, Vale completed the $6.9 billion construction of the Serra Sul iron ore mine, which is expected to produce 75 million tons per year at its peak. Serra Sul, more commonly known as "S11D," is expected to push Vale past its top rival, Rio Tinto plc (NYSE:RIO) (London, England), in annual output. For more information, see Industrial Info's project reports on the rail/terminal expansion and the completed mine.
Serra Sul is now a key part of Vale's "northern system," which is in the Brazilian state of Para and includes the Carajás and Serra Leste mines. The system, which saw record production of 41.5 million tonnes during the quarter, is expected to drive total shipments of iron ore from Brazil as high as 480 million tons in 2020, up from 371 million tons in 2016. But the global market for iron ore already is seeing a glut, which has driven down prices for the material and likely will continue to do so. Late last month, Morgan Stanley (NYSE:MS) (New York, New York) slashed its price outlook for the material, according to Bloomberg, and it expects the global surplus to increase every year to 2021.
Vale slashed its nickel output forecast for 2017 from 317,000 tonnes to 295,000 tonnes, after the start of maintenance and reconstruction efforts at a furnace in Sudbury, Ontario, caused a 16% drop in the second quarter. Industrial Info is tracking the $1 billion replacement and expansion project at the Copper Cliff Nickel Mine in Sudbury, which is expected to wrap up late next year. At the same facility, the company is performing a $1 billion addition of an atmospheric emission reduction plant for the 500,000-tonne-per-year nickel smelter, which will reduce sulfur dioxide emissions to 20,000 tonnes per year.
Vale also is at work on $750 million in additions and expansions at the Voisey's Bay facility near Nain, Newfoundland and Labrador, which will add a 7,200-tonne-per-day nickel mine and expand the concentrator with a grinding circuit to produce 40,000 tonnes per year of nickel-in-concentrate. For more information, see Industrial Info's project reports on the Copper Cliff mine expansion and emission-reduction addition, and Voisey's Bay expansions.
Vale has been moving more of its facilities abroad recently, so as to respond more quickly to demand in Asia and other foreign markets. But the reduction in nickel output could hinder the $1 billion construction of the Pomalaa Nickel Refinery in Kolaka, Indonesia, which involves building a high-pressure acid-leaching line to produce 20,000 tonnes per year, but already has faced at least five years of delays. Vale also has proposed a $1 billion expansion that would double the output, but this would not be considered seriously until the first phase looks more certain. For more information, see Industrial Info's project reports on the proposed first phase and second phase of the Pomalaa refinery.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
