Vale CEO: iron ore expansion plans remain unchanged

Vale CEO Murillo Ferreira said in Shanghai that no matter how the market changes, our expansion will continue. In terms of iron ore expansion, Vale has already obtained capital expenditure approved by the Board of directors amounted to $ 35 billion, including SerraSul and Carajas etc. expansion projects.

In 2016, if these projects can be completed as planned, Vale’s iron ore of annual output will reach 450 million tons.

In the past five or six years, Vale did not like it’s Australia’s competitors to actively expand, but the company’s management does not seem to worry about market share will therefore reduce, Executive Director of iron ore and Strategic Jose Carlos Martins said expansion we are catching up, and the market continues to grow, the capacity is still large. Our expansion is the high-grade iron ore but low cost, even if the price drop is not a problem for us.

Murillo Ferreira reminded that, in the analysis of market supply and demand for iron ore, mine depletion problems are often ignored. Over the past decade, many mines are in full production status, which has resulted in product quality is unstable and resource depletion. Therefore, efficient suppliers to survive, everything is determined by the market. Vale face of the geographical advantages of the Australian competitors, only hard work, reduce costs and provide high-quality products can cope

However, as an important mean to solve the long-distance transport, the outlook of Valmax ship berthing in China is still unknown. Murillo Ferreira said Valemax can wait, even though its cost saving, energy consumption, environmental aspects are good, but Vale respect China’s government agencies, it should take time to understand the benefits of Valemax. Load capacity from 380,000 to 400,000 tons of Valemax freighter is by far the largest ship built in the world.

When asked about the Chinese government plans to reduce 80 million tons of steel production capacity, Murillo Ferreira thought that the Chinese Government has always been more cautious when taken various measures, especially the problem of overcapacity. Currently the Chinese government’s focus remains on solving the problem of local government debt, as well as some economic policies over the past bring impact to the current economic situation.

This year for the first time from Vale sales iron ore to China just right 40 years, In the meantime, Vale sold a total of 1.1 billion tons of iron ore to China, In recent years, China’s consumer market nearly reached half of the total. The next plan is to finish 40-year shipments in the past six years.

In addition to its core business as iron ore, Vale’s key business segment also includes nickel, copper, metallurgical coal and fertilizer, Metallurgical coal of capital expenditures reached $ 6.4 billion.

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