RIO DE JANEIRO — Brazilian miner Vale SA (VALE5.SA) said on Thursday it would seek out fresh copper mining options and stop expanding nickel production capacity after second-quarter net income plunged on forex losses, rising costs and weaker iron ore prices.
Net income tumbled 99 per cent to $16 million from $1.1 billion a year earlier, far below an average estimate of $421 million.The world’s largest iron ore miner kept making slow progress on cutting net debt, which slipped 3 per cent in the three months through June to $22.12 billion – still a far cry from a target of $15 billion to $17 billion by year-end.
Fabio Schvartsman, who took over as CEO in May, said the company was aiming for $15 billion in net debt in 2018, adding that a company reliant on volatile commodity prices should ideally not be carrying debt at all.
“I personally don’t have $15 billion as a target for the company’s debt. Vale’s debt has to be as low as possible. Certainly below 15 is our goal,” he said on a conference call.
Schvartsman also said Vale would cease to invest fresh funds in its Caledonia nickel mine, in a bid to reduce costs.
Vale remains Sudbury’s largest employer at about 4,000 workers. It operates six mines, a mill, a smelter and a refinery. and is one of the largest integrated mining complexes in the world. Vale mines nickel, copper, cobalt, platinum group metals, gold and silver here.
In May, Vale ceased production at its Stobie mine due to a variety of factors, including lower grades and volumes of nickel, declining world nickel prices and the fact that miners can’t work below the 3,000-foot level due to seismic activity.
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