Simandou iron ore offsets depletion as demand balances market: Vale

The iron ore market will remain balanced in the long term as global demand continues to expand despite lower steel production in China, while massive new supply from Guinea's Simandou mine will mainly help offset iron ore resource depletion, Gustavo Pimenta, CEO of Brazilian mining company Vale, said at the FT Metals & Mining Summit, taking place in London Oct. 14-16.

"The market will continue to be balanced for the reason of the amount of depletion that we are seeing. There's about 60 million to 80 million tons of annual depletion in the iron ore space," Pimenta said.

In his view, Simandou, which is expected to reach a production capacity of up to 120 million mt/year by 2030, will help offset that depletion, while also upholding demand for ultra-clean ore.

Iron ore from Simandou has a higher alumina content, an impurity in steelmaking. This makes Vale more important as "the corrector of the entire system", said Pimenta, meaning that the company's low-alumina iron ore products become even more sought after as blast furnace feeds with poorer chemical characteristics must be blended with high-purity ones.

Vale is also unaffected by China's crude steel production decline, Pimenta said at the FT summit.

China's crude steel production fell 3.1% year over year to 651.9 million mt over January-August 2026, according to the World Steel Association.

"China continues to be a very important market," Pimenta said, highlighting the country's "massive" growth in manufacturing.

Steel capacity rollouts seen outside China are encouraging for iron ore demand in the long term is, Pimenta said, adding, "Vietnam is tripling its crude steel production. India is going to increase it from 170 million to about 600 million tons [metric tons]."

Pimenta added an increasing share of Vale's earnings is going to come from its copper business, which "is the most underappreciated copper story in the industry".

"We have the highest growth among majors, producing about 380,000 mt and [targeting] 700,000 mt of copper, mostly in Carajas, in Brazil, with very low capital intensity," he said.

One of Vale Base Metals' two projects under construction has half the capital intensity of a typical greenfield, as the company already has rail, port, and other infrastructure in place in Brazil, and due to the quality of its natural resource endowment, according to Pimenta.

With that development in the pipeline, he expects Vale Base Metals' contribution to the company's EBITDA to increase to 40% from 30%.