Vale’s Strong Operational Performance and Strategic Focus in 2024
Brazilian mining giant Vale marked 2024 as a year of operational resilience and achievement, reaching new production records and advancing crucial projects in its mineral portfolio. The company’s focus on maintaining stability and optimizing its product offerings allowed Vale to navigate market volatility while maintaining a competitive edge in key sectors, including iron ore, copper, and nickel.
Iron Ore Production and Market Optimization
Vale’s iron ore production in 2024 totaled 328 million metric tons, the highest figure since 2018, surpassing its initial guidance of 310-320 million metric tons. This marked a notable achievement for the company, as it steadily ramped up production despite global market uncertainties. In the fourth quarter, iron ore production totaled 85.3 million metric tons, a decrease of 5% year-on-year, reflecting Vale’s decision to prioritize higher-margin products under a portfolio optimization strategy.
Despite a dip in overall quarterly production, the S11D mine in Vale's Northern System set a new production record of 83.0 million metric tons in 2024. This performance was bolstered by an optimized maintenance strategy, leading to greater operational stability and more efficient asset utilization. Additionally, Vale's Southern System production declined by 7.7 million metric tons year-on-year due to a focus on higher-margin product production and the reduction of low-quality, high-silica ores.
Pellet Production and Sales Decline
Vale’s pellet production in 2024 stood at 38.3 million metric tons, a 6.9% y/y increase. However, in the fourth quarter, pellet production declined by 0.7 million metric tons, mainly attributed to maintenance activities at the Vargem Grande plant. The company faced a 10% y/y decline in iron ore sales, with 81.2 million metric tons t sold in Q4, driven by the reduction in direct sales of high-silica products. As a result, Vale directed more of these products to blended product formation and concentration plants in China, contributing to improved premium pricing.
Copper Production Records and Nickel Milestones
In copper production, Vale achieved a 3% y/y increase in Q4, totaling 101.8 kt, driven by stronger performances at the Salobo complex and Sudbury operations. The ramp-up of the Voisey’s Bay underground mines also contributed positively to production numbers. The company’s copper production for the full year reached 348.2 kt, up 6.6% from 2023, meeting expectations despite global market fluctuations.
For nickel, Vale produced 45.5 kt in Q4, a slight 1% y/y increase. The company's strong performance at Onça Puma following a furnace rebuild and the ramp-up in Sudbury and Voisey’s Bay mines helped maintain steady production levels. The nickel production for the year totaled 159.9 kt, representing a 3% y/y decrease, though this was offset by improved operational performance in key regions.
Price Realization and Revenue Impact
Vale’s iron ore fines achieved an average realized price of US$ 93.0 per metric ton in Q4, reflecting a 2.6% increase from the previous quarter. This price surge was driven by the improvement in premium pricing and stronger global iron ore market conditions. Meanwhile, iron ore pellets saw a slight price decline, with the average price reaching US$ 143.0/t, down 12.5% y/y.
In nickel, prices softened, with Vale’s average realized nickel price dropping 12.3% y/y to US$ 16,163 per metric ton in Q4. However, the increase in copper prices, with an average realization of US$ 9,187 per metric ton, helped bolster Vale's overall revenue, marking a 10.7% y/y increase.
Project Developments and Future Outlook
Vale’s performance in 2024 was also marked by the completion of the VBME project in nickel, marking a key milestone in the company’s broader nickel production strategy. Meanwhile, the Capanema project, located at the Mariana complex, began its commissioning in November, adding 15 million metric tons per year to Vale’s iron ore production capacity. This project is expected to enhance Vale’s product portfolio flexibility, producing sinter feed using natural moisture processes, which will benefit both production efficiency and sustainability.
Looking ahead to 2025, Vale has provided guidance for its iron ore production to range between 325-335 Mt, with a focus on maintaining higher-margin product output. The company also anticipates continued growth in its copper and nickel production, with forecasts for 340-370 kt of copper and 160-175 kt of nickel.
