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VALE Stock Gains on Increased Iron Ore Production Forecast for 2024
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Vale S.A. (VALE - Free Report) raised its 2024 production guidance for iron ore. The company also reported progress in negotiations related to the Samarco dam disaster with a settlement expected in October. The iron ore miner has started wet processing operations at the Vargem Grande 1 Project. These developments have contributed to a 6% increase in Vale’s share price.
VALE Projects Y/Y Increase in Iron Ore Output in 2024
The iron ore miner expects iron ore production of 323-330 Mt for 2024. The updated guidance indicates growth of 1-3% from the 321 Mt of iron ore produced in 2023.
This is a revision from Vale’s previous guidance of 310-320 Mt, which indicated a decline of 0.3-3.4%.
Vale Lowers Nickel Guidance for 2024
Vale expects nickel output in 2024 between 153 kt and 168 kt, down from the earlier stated 160-175 kt. In 2023, it had produced 164.9 kt of nickel. The revised guidance indicates a year-over-year decline of up to 7.2% to growth of up to 1.9%.
Vale cited the partial divestment from Vale Indonesia, completed in July, as the reason for the revision in expectations.
VALE Starts Wet Processing Operations at Vargem Grande 1
Vale has started the commissioning of wet processing operations in the Vargem Grande 1 Project in Minas Gerais, one month ahead of schedule. This will aid iron ore production at the Vargem Grande complex to resume the level of 15 million metric tons per year.
The Vargem Grande 1 plant has been operating with natural moisture since 2019 due to the unavailability of water capture and disposal at the Vargem Grande dam. The dam is currently undergoing de-characterization, a process that eliminates the dam's function of retaining tailings and water to increase the safety of nearby communities.
With the shift to wet processing, Vale expects to improve the project’s average ore quality by approximately 2% in iron content. The project is expected to aid it in achieving iron ore production guidance of 340-360 million metric tons by 2026.
Vale Conducting Checks on Forquilha III Dam
Following a routine inspection that identified superficial cracks in the Forquilha III dam at the Fábrica mine in Ouro Preto, Vale is conducting further verifications.
Although the Forquilha III dam is at emergency level 3, the company stated that the structure’s stability conditions remain unchanged. Safety measures, including downstream containment and evacuation zones, are in place.
Vale to Reach Settlement Soon for Samarco Dam Failure
On Nov. 5, 2015, the Fundão tailings dam at the Samarco Mariana Mining Complex collapsed and caused environmental and community impacts, claiming 19 lives. The dam was owned and operated by Samarco, a joint venture between BHP Group’s (BHP - Free Report) subsidiary and Vale.
Vale, alongside Samarco and BHP, has been in negotiations with Brazilian authorities to seek a settlement for the obligations and other claims related to the dam failure. Last week, it confirmed that the negotiations have advanced and the company, along with BHP and Samarco, expects to reach a final settlement in the mediation process in October 2024.
VALE Stock’s Price Performance
Vale’s shares plunged 25.3% in a year, in line with the industry.
Image Source: Zacks Investment Research
The decline in Vale’s share price reflects the downward trend in iron ore prices this year as China’s prolonged property crisis has impacted demand for iron ore. Prices are currently at around $92 per ton, dragged down by disappointing economic data from China.
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares have gained 106.1% in a year.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share. The consensus estimate for earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG’s shares have gained 135.7% in a year.
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Vale S.A. (VALE - Free Report) raised its 2024 production guidance for iron ore. The company also reported progress in negotiations related to the Samarco dam disaster with a settlement expected in October. The iron ore miner has started wet processing operations at the Vargem Grande 1 Project. These developments have contributed to a 6% increase in Vale’s share price.
VALE Projects Y/Y Increase in Iron Ore Output in 2024
The iron ore miner expects iron ore production of 323-330 Mt for 2024. The updated guidance indicates growth of 1-3% from the 321 Mt of iron ore produced in 2023.
This is a revision from Vale’s previous guidance of 310-320 Mt, which indicated a decline of 0.3-3.4%.
Vale Lowers Nickel Guidance for 2024
Vale expects nickel output in 2024 between 153 kt and 168 kt, down from the earlier stated 160-175 kt. In 2023, it had produced 164.9 kt of nickel. The revised guidance indicates a year-over-year decline of up to 7.2% to growth of up to 1.9%.
Vale cited the partial divestment from Vale Indonesia, completed in July, as the reason for the revision in expectations.
VALE Starts Wet Processing Operations at Vargem Grande 1
Vale has started the commissioning of wet processing operations in the Vargem Grande 1 Project in Minas Gerais, one month ahead of schedule. This will aid iron ore production at the Vargem Grande complex to resume the level of 15 million metric tons per year.
The Vargem Grande 1 plant has been operating with natural moisture since 2019 due to the unavailability of water capture and disposal at the Vargem Grande dam. The dam is currently undergoing de-characterization, a process that eliminates the dam's function of retaining tailings and water to increase the safety of nearby communities.
With the shift to wet processing, Vale expects to improve the project’s average ore quality by approximately 2% in iron content. The project is expected to aid it in achieving iron ore production guidance of 340-360 million metric tons by 2026.
Vale Conducting Checks on Forquilha III Dam
Following a routine inspection that identified superficial cracks in the Forquilha III dam at the Fábrica mine in Ouro Preto, Vale is conducting further verifications.
Although the Forquilha III dam is at emergency level 3, the company stated that the structure’s stability conditions remain unchanged. Safety measures, including downstream containment and evacuation zones, are in place.
Vale to Reach Settlement Soon for Samarco Dam Failure
On Nov. 5, 2015, the Fundão tailings dam at the Samarco Mariana Mining Complex collapsed and caused environmental and community impacts, claiming 19 lives. The dam was owned and operated by Samarco, a joint venture between BHP Group’s (BHP - Free Report) subsidiary and Vale.
Vale, alongside Samarco and BHP, has been in negotiations with Brazilian authorities to seek a settlement for the obligations and other claims related to the dam failure. Last week, it confirmed that the negotiations have advanced and the company, along with BHP and Samarco, expects to reach a final settlement in the mediation process in October 2024.
VALE Stock’s Price Performance
Vale’s shares plunged 25.3% in a year, in line with the industry.
The decline in Vale’s share price reflects the downward trend in iron ore prices this year as China’s prolonged property crisis has impacted demand for iron ore. Prices are currently at around $92 per ton, dragged down by disappointing economic data from China.
VALE’s Zacks Rank & Stocks to Consider
Vale currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) and IAMGOLD Corporation (IAG - Free Report) . CRS and IAG sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares have gained 106.1% in a year.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share. The consensus estimate for earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG’s shares have gained 135.7% in a year.