Posted on 30 Jul 2024
Brazilian miner Vale has benefitted from higher copper prices even if production levels have remained the same, Kallanish Power Materials notes.
In the quarter ended 30 June, net operating revenue was up by 3% year-on-year to $9.9 billion, also helped by better performance in the iron ore segment.
Net income more than tripled to $2.7 billion following Manara Minerals’ acquisition of a 10% stake in Vale Base Metals (VBM), the holding company of Vale’s energy transition metals business, for $2.5 billion.
Copper production was flat on-year at 78,600 tonnes, although net revenues jumped by 45% to $779m. Adjusted earnings in the copper segment rose by 49% to $351m due to a 31% increase in average realised copper prices at $9,202/t, as well as strong operational performance at the Salobo project in Brazil.
Nickel production was 24% lower at 27,900t, with revenue dropping by 28% to $879m. Adjusted earnings dropped by 54% to $108m due to a 19% decline in realised nickel prices of $18,638/t. This was due to lower nickel prices at the London Metals Exchange and a drop in sales volumes following planned maintenance strategy at the nickel processing plants.
Copper and nickel all-in costs were $3,651/t and $15,000/t in the quarter, respectively.
Cobalt production halved to 320t, with the average realised price down 19% to $28,258/t.
Analysts at Jefferies comment: “If Vale continues to deliver on its operational targets, we expect its Ebitda [adjusted earnings] to grow from around $17 billion in 2024 to a peak of around $20 billion in 2026. The biggest delta to earnings will of course be the iron ore price, which we expect to drift lower, but Vale is positioned to benefit from higher volumes in all segments and a higher copper price.”
Source:Kallanish Power Materials
