As the prices of iron ore have not recovered to the same levels seen a year ago, Brazilian miner and iron ore producer Vale has focused on cost reductions as well as a growing market share will help it to endure the currently low prices for the commodity, according to a media report.
In an industry event this week, the company’s CEO, Murilo Ferreira, said the company has been focusing reducing expenses ahead of the start of its S11D project, the company’s lowest cost iron ore initiative.
Ferreira said Vale’ diagnosis of the end of the “supercycle” came “at the right moment.” There was an expressive reduction in Vale’s costs, with more to come according to media reports.
As the start-up of Vale’s S11D nears, the company assumes it will need to consider
“drastic decisions.”
The Brazilian company plans to reduce the average cost of the iron ore it delivers to China to $30.80 per dry mt by 2018 from $39.10/mt in the second quarter, the company said a month ago, while commenting the implementation of the S11D project in the northern region of Brazil.
Ferreira said Brazil and Australia are gaining market share in China, the world’s top consumer of the commodity. The capacity expansion of the world’s top producers, BHP Billiton, Rio Tinto and Vale, have helped the commodity’s price to reach low levels as seen recently.
Vale claims its S11D iron ore project is the world’s class project, which has the better quality and the lowest cost.