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Vale posts record iron ore production in 2017

Vale SA on Feb. 16 posted production results for the fourth quarter and full-year 2017.

The Brazilian mining giant's iron ore production rose 1.1% year over year to 93.4 million tonnes in the fourth quarter and 5.1% to 366.5 million tonnes in the year, driven by record production at its Northern System operations in Brazil, due to the S11D mine and plant ramp-up.

Annual iron ore production was close to the end of its guidance range of between 360 million and 380 million tonnes, mainly due to reduced production of iron ore with high silica content from the Southern and Southerneastern Systems, in line with its strategy to maximize margins.

The company maintained its previously stated production guidance for 2018 of about 390 million tonnes.

Vale's annual pellet output came in at 50.3 million tonnes, which was a record and an 8.8% improvement over 2016 thanks to higher productivity and less scheduled maintenance stoppages. Quarterly pellet production increased 2.2% to a record of 12.9 million tonnes.

The company remains on track to start the Tubarão I and Sao Luis pellet plants at the end of first quarter and third quarter, respectively, while the Tubarão II pellet plant started operations in January.

Vale's annual nickel output dropped 7.3% to 288,200 tonnes, with fourth-quarter output falling 6% to 78,000 tonnes.

The mining major reported 2017 copper production of 438,500 tonnes, in line with 2016 and guidance of 438,000 tonnes, with final quarter output falling 6% to 113,500 tonnes. The production decrease at the Canadian operations was mainly due to the flowsheet transition toward a smaller footprint there but also due to the impact of an unscheduled maintenance shutdown at the Coleman mine, part of Vale's Ontario operations, which was offset by record annual production at Salobo in Brazil.

Vale's annual gold production, as a byproduct of nickel and copper concentrates, was a record 485,000 troy ounces, compared to 483,000 ounces produced a year ago. In the fourth quarter, output increased 1.5% to 139,000 troy ounces.

With the ramp-up of the Moatize II coal mine in Mozambique, the company's annual coal production jumped 56% to 11.3 million tonnes, with the sale of Queensland, Australia-based Carborough Downs operations in November 2016 partially offsetting the rise in production.

Fourth-quarter coal production came in at 2.6 million, which is 19.8% lower on a yearly basis mainly impacted by an already-addressed failure in one of the hydraulic excavators at Moatize, which was also the main reason for the lower production, even when compared to the 11.7 million-tonne forecast announced in 2017.