Brazilian iron ore producer Vale said this week during a conference call with analysts that the company’s iron ore inventories are expected to fall 10 percent in 2016, year-on-year, as a result of shipments of old inventory from its South System mines in the region of Vargem Grande, in the state of Minas Gerais.
According to the company’s director of ferrous, Peter Poppinga, Vale’s iron ore inventories are now reaching between 55 and 56 million mt, 3 million mt down in Q3, when compared to Q2.
The company also said it expects to produce iron ore at a cost of $10/mt in all its mining systems “in the near future.” The price target includes the mine, the benefaction and the transportation of the iron ore to the port in Brazil.
As of Q3, Vale’s cash cost FOB port for iron ore finex ex-royalties reached $12.70/mt, down from $15.80/mt in Q2, same conditions.
As for the $10/mt cost estimate, Vale considered the start-up of its SD11 iron ore project.
Vale’s finance and investor relations director Luciano Siani said Vale’s raised about $3 billion with sale of assets. The executive rejected the idea that Vale could be pressured to close the sale of other assets, as a result of the completion of its SD11 iron ore project.