Vale SA’s iron ore production fell short of estimates in the third quarter as the world’s largest producer of the steelmaking ingredient faced challenges at a mine in northern Brazil. Iron ore output totaled 88.35 million metric tons in the three months through September, below the 91.64 million-ton average estimate and down about 6% from a year earlier. The Rio de Janeiro-based miner posted adjusted earnings before items of $3.51 billion, compared with the $3.32 billion expected by analysts surveyed by Bloomberg. The result fell 20% year-on-year, mainly reflecting weaker iron ore prices and higher costs. Benchmark prices of the commodity have fallen more than 12% this year, recently dropping below $90 a ton in Singapore. Goldman Sachs estimates prices for 2027 will average $93 a ton.
Production was affected by lower output at its critical Serra Norte mine, even as Vale continued to ramp up other Brazilian operations, according to the company. Vale said it had “operational constraints in mining areas near cave-related exclusion zones.” The company expects the Brazil government to review rules protecting caves from mining to unlock major projects in the Amazon. The miner kept its full-year iron ore production guidance unchanged at 335 million to 345 million metric tons, while adding it remains confident it will meet the lower end of the guidance range.
Vale’s iron ore costs rose from a year earlier, pressured by a stronger Brazilian real, war-fueled diesel and freight costs, and a less favorable production mix. While Vale still generates roughly three-quarters of its revenue from iron products, its base metals subsidiary is becoming a growing part of its business. Copper output totaled 86.300 tons, down 6% from a year earlier, while nickel rose 6%. The base metals earnings increased 61% compared to the year-ago period on higher prices.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing