Vale updates production and cost forecasts for 2020 and 2021Dec, 03, 2020 Posted by Ruth Hollard
On Wednesday, November 2, Vale released an update of production and cost estimates for 2020 and 2021. In a report to the market, the company announced that the estimate of iron ore production in 2020 will be in the range of 300 -305 million tons. For 2021, the estimate is from 315 to 335 million tons.
Regarding copper, the mining company announced a production forecast of 390,000 tons in 2021. The average estimate for the period 2022-2024 would be 455,000 tons. In 2025, copper production is expected to be around 500,000 tons.
The average nickel production should be 200,000 tons between 2021 and 2023, with a projection of 220,000 tons between 2024 and 2025.
In a presentation to investors on the New York Stock Exchange at the end of last year, the company forecast iron ore production at between 340-355 million tons for 2020.
Vale intends to invest US$ 5.8 billion in 2021, according to the projections released by the company. US$ 4.8 billion refers to maintenance and US$ 1 billion to expansion projects.
For 2020, the mining company maintained its investment projection at US$ 4.2 billion. The average investment for the coming years will be US$ 5.5 billion.
Vale also announced that the cash cost for iron ore was US$ 13.60 per ton in 2020. The mining company also said that when production reaches 400 million tons per year, the cash cost will be between US$ 10.50 – US$12.00 per ton.
Provision to de-characterize dams
Vale also announced that it will make an additional provision of US$ 670 million (nominal value) for the execution of the dam de-characterization plan in the fourth quarter’s financial statements.
The mining company estimates that by the end of 2020, provisions will reach US$ 2.7 billion. This amount, says Vale, is subject to review based on disbursements made until the end of the year.
Source: Valor Econômico
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