Vale SA (ADR)(NYSE:VALE), the world’s biggest iron-ore miner saw a slight decline in its iron ore production in the second quarter but exceeded analysts’ estimation. The company noted that it produced 86.82 million tons of iron ore in the April to June period, a 2.8% decline from last year’s 89.3 million tons. Last year’s number included output from synergies between Vale’s Samarco joint venture and some of the company’s southern east mines. Samarco has been shut due to a dam breach in November
Compared to the first quarter, the company’s production of iron ore increased 12%. Five analysts from Bloomberg had on average estimated the company to produce 86 million tons in the second half, a figure it surpassed by 0.68 million. The prices of iron ore have increased by more than 20% compared to last year.
Vale is maintaining its goal of2016 that sets output to hit the lower end of its range of 340 million to 350 million tons of the year. Last year, the company broke its annual production record with 345.9 million tons. In the just released report, Vale has lowered its expectation for 2017 citing supply-chain issue. The company noted that it would produce less than the 380 to 400 million tons originally predicted for the next year.
Meanwhile, Vale’s nickel and copper production increased in the second quarter. Vale is also the world’s largest nickel producer and saw nickel production rise by 17% during the second quarter to reach 78,500 metric tons. Copper production grew by 2.4% in the quarter to 107,400 tons. Conversely, the company’s output of coal dropped 25.2% in the quarter to 1.5 million tons.
The company has also announced Samarco plans to resume operations in 2017. Initially, the company had hoped to restart by the end of this year