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Vale’s Production Is Strong, Investors Await Q4 Results

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Vale’s iron ore production

On March 26, Vale (VALE) reported its fourth-quarter production. The company’s iron ore production was 101 million tons in the fourth quarter—an increase of 8.2% YoY (year-over-year). Vale’s production was 384.6 million tons in 2018, which is slightly below its guidance of 390 million tons.

Vale mentioned that the annualized impact of the dam burst and mine closures on its production will likely be 92.8 million tons. Previously, Vale was expected to produce ~400 million tons of iron ore (XME) in 2019. Due to the dam burst and capacity curtailment, the company probably won’t reach the expected production.

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Vale’s copper and nickel production

Vale’s copper production for 2018 was 395,500 tons—a decline of 9.8% YoY. However, the decline was expected due to the company’s strategic decision to reduce its nickel footprint. The decline also reduced the production of copper by-product.

Vale’s nickel production fell 15% YoY in 2018 to 244,600 tons. The company’s coal production was in line with 2017 at 11,605 tons.

Vale’s fourth-quarter results

Vale is scheduled to release its fourth-quarter results on March 27. Investors are looking forward to the company’s plan to mitigate the impact of the dam disaster on its operations.

Rio Tinto (RIO) released its 2018 results on February 27. The company’s EPS of $5.12 beat the consensus estimates by 5%. Rio Tinto’s revenues of $40.5 billion were also higher than the consensus estimate of $39.8 billion. BHP Billiton (BHP) declared its results on February 19. The company’s results were weaker than expected.

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