Brazil headquartered mining giant, Vale’s second quarter (Apr-Jun) 2020 results are out and the company’s coal production have been recorded at 1.28 mn t, down by 35% q-o-q basis and 46% y-o-y basis.
–While metallurgical coal production stood at 0.69 mn t, down by 39% y-o-y, thermal coal output has been recorded at 0.69 mn t, down by 53% y-o-y.
–Company’s coal sales during Q2 CY’20 stood at 1.39 mn t, down by 12% q-o-q and 34% y-o-y basis.
–Metallurgical coal sales stood at 0.52 mn t down by 27% q-o-q and 50% y-o-y basis whereas thermal coal sales have been recorded at 0.87 mn t, down by 1% q-o-q and 18% y-o-y basis.
The company stated that the fall in production and sales reflects the effects of the COVID-19 pandemic. After reaching a record production in Mar’20, compared to the previous 15 months, Vale decelerated production in Moatize mine, starting Apr’20.
Amid continued demand constraints, the company temporarily stopped production in Jun’20 resulting in production loss of approximately 1 mn t being accounted in Q2 CY’20.
As long as unfavourable market conditions persist, additional temporary stoppages may occur resulting which the company has not provided new coal production guidance for 2020.
Amid the uncertainties brought by COVID-19, Vale has decided to postpone the 3-month maintenance plan revamp making it impossible to achieve a sustainable ramp-up of the operation in 2020.
The company would start the necessary revamp as soon as it can guarantee the inbound logistics of equipment and materials to the site, as well as ensure the required safety levels to its employees.
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