Brazilian mining giant Vale has reduced its 2021 capex estimates to US$5.4bn and cut iron ore guidance for 2022, reacting to downward price pressure.
"Vale is making a strategic decision, because it reduces capex that was directed toward increasing production to avoid major iron ore supply in the market as China is acting to reduce demand. Vale takes this step to contain a drop in [iron ore] prices in the medium term," Valdir Farias, executive director at mining consultancy Fioito, told BNamericas.
Previously, the company aimed to invest US$5.8bn this year. Vale did not highlight potential effects on specific projects.
At a conference call with analysts, Vale said iron ore production is estimated to reach 370Mt at end-2022, compared to the previous estimate of 400Mt. Guidance for this year remained unchanged at 343Mt.
GREEN INITIATIVE
Vale also announced the launch of the green briquette product, which was under development for almost 20 years and helps reduce greenhouse gas emissions by up to 10% in the steel production process.
