Production at Vale’s S11D iron ore mine in the state of Para will be limited to 83 percent its capacity due to the company’s efforts to preserve cash without increasing Capex.
The S11D iron ore mine was expected to produce 90 million mt of the commodity, but should now produce 75 million mt of iron ore based on the new forecast.
Vale told a British business newspaper there has been a “replanning” of the execution of construction works on the logistics corridor of the project in a “phased form,” so it could “minimize interference with existing operations and optimize cash flow without increasing the project's capital spending.”
Vale added the 75 million mt output should supply international sea-borne clients, following a four-year ramp-up at the $14.3 billion project. Despite the limited production capacity for now, Vale clarified it won’t affect the project’s total 90 million mt capacity, adding that the company will produce “based on market demand.”
“Vale is prioritizing the optimization of margins and the minimization of interferences with its existing operations, so the production coming from S11D fits in this strategy,” said Peter Poppinga, Vale’s iron ore chief.
The company also said it plans to gradually ramp up production of the mine in four years and not in two as previously expected.