MercoPress, en Español

Montevideo, December 22nd 2024 - 08:13 UTC

 

 

Record profits for world’s largest iron ore producer on China’s insatiable demand

Friday, February 25th 2011 - 06:20 UTC
Full article 6 comments
Vale shipped 81.9 million tons of iron ore during the fourth quarter  Vale shipped 81.9 million tons of iron ore during the fourth quarter

Brazilian mining giant and the world’s largest iron- ore producer Vale SA said its fourth-quarter profit almost quadrupled, because of surging prices for the raw material used to make steel.

Net income climbed to 5.92 billion US dollars or 1.12 USD a share, from 1.52 billion, or 28 US cents, a year earlier, Rio de Janeiro-based Vale said in a statement.

Vale plans to invest 24 billion USD this year, more than rivals BHP Billiton and Rio Tinto Group, to expand its output capacity to 522 million metric tons of iron ore by 2015, enough to supply about 10 months of China’s imports.

Iron ore prices rose to the highest since at least 2008 last week on stronger Chinese demand and speculation that India, the world’s third-largest exporter, will further curtail supplies.

“The performance of iron-ore and pellet prices over the year shows the imbalance between global demand and supply” Vale said in the statement. The imbalance “was the main reason for the significant revenue increase.”

Revenue more than doubled to 15.2 billion USD from 6.54 billion USD in the fourth quarter. Vale sold its iron ore for an average of about 121 USD a ton, up from about 56 USD a year earlier.

Vale shipped 81.9 million tons of iron ore and pellets in the period, up 17%t from a year earlier, the company said in the filing. Quarterly profit fell short of a previous record of 6.04 billion USD in last year’s third quarter.

BHP plans to spend 80 billion USD by the end of the 2015 financial year to expand and develop its mines, including coking coal and iron-ore projects, of which 15 billion will be invested during 2011. Rio Tinto said Feb. 10 that it expects to invest about 13 billion USD during this year.

Melbourne-based BHP is the world’s largest mining company and Rio Tinto is the third largest by market value.

“We are doubling the capacity of the company and probably the demand for this expansion will come from Asia,” Guilherme Cavalcanti, Vale’s chief financial officer, said in an interview Dec. 8. “We are very bullish on the region.”

Vale said its nickel output more than doubled from a year earlier to 65,000 metric tons, while copper production climbed to 76,000 tons from 32,000 tons.

However the company said last week that its total nickel production will be cut by about 5% this year as it repairs a damaged furnace at its Copper Cliff plant in Canada. The company, which last year said it was expecting to become the world’s top nickel producer in 2011, will lose about 15,000 metric tons of annual refined nickel production because of the downtime.
 

Categories: Economy, International.

Top Comments

Disclaimer & comment rules
  • briton

    all bubbles will burst in the , and only the greedy will get caught,
    china will get the blame, and the ordinary people will pay the price.
    just an opinion.

    Feb 25th, 2011 - 12:54 pm 0
  • Forgetit87

    Misery likes company, huh?

    Feb 25th, 2011 - 06:20 pm 0
  • briton

    Sounds very fishy to me .

    Feb 25th, 2011 - 07:04 pm 0
Read all comments

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!