RIO DE JANEIRO (Reuters) – Brazil’s Vale, the world’s no. 1 nickel producer, plans to save well over $150 million by reducing costs across its nickel operations, which have notched positive cash flow for the past two months, company executives said on Wednesday.
As the miner strives to diversify away from its massive iron ore presence, it is aiming for base metals to account for at least 30 percent of its financial results by the end of 2019. Last year, base metals stood at about 14 percent of earnings before interest, taxes, depreciation and amortization (EBITDA).
“I hope that the 30 percent estimate turns out to be conservative in terms of the share that base metals have in Vale’s results,” Chief Executive Officer Fabio Schvartsman said in a conference call with analysts, a day after the company reported a 47 percent jump in fourth-quarter earnings.
But the company has struggled over its presence in the nickel segment, where prices have yet to pick up because of oversupply, despite the metal’s key role in lithium-ion batteries that are used in electric cars.
Vale has said it will halt new investment in nickel operations and has been looking for years for an investor for its New Caledonia nickel mine, located on a Pacific Island.