Vale SA's third-quarter iron ore production fell 17.4% year over year to 86.7 million tonnes from a record 104.9 Mt, while pellet production fell 19.8% to 11.1 Mt from a record 13.9 Mt.
Iron ore sales fell 11.8% to 74.0 Mt as pellet sales sunk 22.3% to 11.1 Mt. Despite further slashing its annual pellet production target to 43 Mt, Vale reaffirmed its iron ore and pellet sales guidance of between 307 Mt and 332 Mt, with sales estimated to be around the midpoint.
The Brazilian mining giant noted Oct. 14 that production of iron ore and pellets grew 35.4% and 22.7% quarter over quarter, respectively, thanks to the resumption of the Brucutu mine in June and the partial resumption of the dry processing operations at the Vargem Grande complex in July. Both operations had been suspended in the wake of the fatal dam breach at the Feijao iron ore mine in January.
The quarterly improvement was also attributed to the stronger performance of the Northern System, which was impacted by unusual weather-related conditions in the second quarter.
Vale expects to recover about 50 Mt of lost capacity by 2021 due to progress on resuming some of the operations that were halted following the Feijao disaster.
Manganese ore production dropped 8.1% year over year to 443,000 tonnes, nickel production sagged 7.7% to 51,400 tonnes, and copper production rose 4.0% to 98,300 tonnes. Cobalt output decreased 1.8% to 1,009 tonnes, while coal output fell 26.4% to 2.4 Mt.
Meanwhile, Vale unit PT Vale Indonesia Tbk. signed a heads of agreement for the sale of a 20% stake in the company to PT Indonesia Asahan Aluminium (Persero), with a definitive deal expected by the end of the year. The stake sale is part of Vale's effort to comply with Indonesia's requirement for foreign-controlled miners to slash their ownership to 49% or less within 10 years of production.