Brazilian miner and iron ore producer Vale said it expects to reduce iron ore production in 2017 as a result of the company’s inventory management strategy, which aims to favor margins instead of volumes.
The company said it expects to extract some 340 million mt of the commodity from its mines in 2016, whose volume is “equivalent” to the base goal Vale has set for its production this year. At the end of 2015, Vale estimated a 2016 iron ore production total of 380-400 million mt.
“The optimization efforts of the supply chain will continue in 2017, with important reductions in inventory at the South System [in the state of Minas Gerais],” the company said in its Q2 production report, while indicating it has flexibility to “produce less, since there’s space to reduce inventories.”
The company did not give an exact estimate for 2017 production figures, only that it will be less than 2016.