Brazilian miner Vale SA reported on Tuesday a 3.9% year-on-year decline in its third-quarter iron ore output, hit by a production snag at a key mine.
The firm produced 86.2 million metric tons of iron ore during the July-to-September period, according to a securities filing.
The miner’s quarterly production was hit by a one-time failure of a conveyor belt system in August at its S11D mine complex in northern Brazil, the filing added.
The failure caused lost production of around two million tons. Despite this, production was up 9.5% from the second quarter.
Vale also mentioned a lower run-of-mine production from its Paraopeba mining complex.
Iron ore sales, meanwhile, grew 6.6% to reach 69.1 million tons, as the firm said it benefited from favorable market conditions.
The fresh figures marked the third consecutive quarter Vale reported shipments well below its output, raising concerns for further inventory build after signaling it would draw down its stocks.
The build-up in iron ore inventory is increasingly concerning to us considering the potential for a weak Q4 period and this might call into question FY24 volumes,” analysts at RBC wrote in a note to clients.
Even so, Vale’s iron ore operations hit its targets, “but there is little else that is not a material miss in these results,” RBC analysts said. Consensus estimates for the firm’s earnings, scheduled for next week, should come down sharply, they added.
The average price of Vale’s iron ore was $105.1 per ton in the quarter, up 13.5% from a year ago.
Copper production grew 9.8% to total 81,600 tons, mostly due to the ramp-up of Vale’s Salobo III mine.
Despite growing copper output during the quarter, Vale cut its forecast for production of the red metal in 2023 to a range of 315,000-325,000 tons. The company blamed the downward revision on changes at its Coleman mine in Canada as well as additional maintenance at the Salobo mine.
Nickel production fell 18.7% to 42,100 tons, “in line with plan,” Vale said, while sales of the metal came in at 39,200 tons, or 11.5% below a year ago.