Vale’s Q1 nickel output falls on operational issues

About Vale

Vale SA is a Brazilian multinational corporation. Engaged in metals and mining. It is one of the largest logistics operators in Brazil. Vale is the largest producer of iron ore and nickel in the world.

Vale’s nickel production declined in the first quarter of 2017. It was affected by planned maintenance shutdowns and operational challenges. Output of finished nickel came to 71,400 tonnes in the first three months of the year. It went down by 2.9% from the corresponding period of 2016.

In the fourth quarter of 2016, the miner produced 83,000 tonnes of nickel. This also represented a 14% decline.

Decline happened “mainly due to planned maintenance shutdowns in Indonesia and Japan. And someoperational challenges”.

Nickel & iron ore production

Production at Vale’s Thompson operations came to 4,800 tonnes of nickel in the first quarter of 2017. Down by 22.6% y-o-y and down 33.3% against the fourth quarter of 2016.

This reflects “the scheduled Q1 2017 transition to a single-furnace operation and certain operational issues. Including damaging elements in the founder feed and a hot metal leak in the smelter that resulted in approximately 10 days of production loss”.

Meanwhile, production from the Sudbury mines, in Canada, reached 17,900 tonnes in the first quarter of 2017. 8.2% lower than in the first quarter of 2016 and down by 10.1% from the fourth quarter of 2016.

According to Vale, “Sudbury source production was adversely affected, mainly due to inventory drawdown during the Q4 2016 and Q1 2016 periods”. (Fastmarkets)

Sudbury is expected to transition to a single furnace in the fourth quarter of 2017. It took its furnace number 2 offline in March. For a three-month rebuild and expansion

of its capacity.

“This will be the stove in operation when Sudbury officially transitions to a single furnace. Sudbury will have a three-week surface plant-wide scheduled maintenance shutdown in the second quarter of 2017.”

Nickel production decline

Vale’s total nickel production from all its Canadian operations came to 36,100 t in the first quarter of 2017, down by 1.4% from a year earlier and 16.8% lower than in the fourth quarter of 2016.

Meanwhile, Vale’s Indonesian operation saw its nickel in matte production reach 17,200 t in the first quarter of 2017. 2.0% higher than in the same period of 2016. But 12% lower than in the fourth quarter of 2016.

“The weaker nickel in matte production was due to the adverse impact of a planned maintenance works in its kilns and furnaces, if compared with Q4 2016.” (Vale)

Meanwhile, production of finished nickel from PTVI totaled 16,300 t in the first quarter of 2017, down by 8.4% on an annual basis and 25.2% lower than in the fourth quarter of 2016.

The output was negatively affected by a scheduled annual maintenance shutdown at the Matsusaka refinery in Japan.

By contrast, production of finished products from Vale’s New Caledonia operation (VNC) reached a record of 10,200 t in the first three months of 2017.

This represents an increase of 5.2% from the first quarter of 2016 and is 14.6% higher than in the fourth quarter of 2016.