Mining giant Vale is looking at expanding its flagship iron ore project in Brazil amid growing Chinese appetite for higher-grade varieties of the commodity, a company official said on Thursday.
China, the world’s top consumer of the steelmaking ingredient, has ramped up buying of higher-quality, less polluting grades as it battles to clear its notoriously smoggy skies.
Peter Poppinga, executive director at Vale, said at an industry conference in China that the world’s largest iron ore miner was studying expanding its S11D project in the Amazonian state of Para, even though it was still being ramped up after it was inaugurated in December 2016.
“Given all these quality trends (that are) favourable to us, we are studying to increase the project, but there are no numbers yet,” Poppinga said.
Heavy spending on the project, which churns out rich grades of ore, has driven up Vale’s debt, coinciding with a sharp slide in iron ore prices.
Poppinga said the mine’s iron ore output would be close to 90 million tonnes next year, up from around 60 million tonnes currently.
However, he said that Vale is aiming to keep its total production at around 400 million tonnes, replacing low-quality iron ore with higher-grade material.
“We think this is a healthy level going forward when you think about margin optimisation,” Poppinga said.
“We are not after market share, we are after value and not after volume.”
Poppinga said that almost 90 percent of Chinese steel capacity will comply with new emission standards by 2025.
Source: Reuters
