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

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

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