Vale SA (ADR)(NYSE:VALE) reported that net debt in the second quarter of 2016 dropped almost 1% to $27.5 billion, while the cost of supplying iron ore to China declined to $30.30 a tonne including capital costs. However, with capital costs excluded, the cost of supplying iron ore to China stood at $28.50 a tonne.
Luciano Siani, the CFO, said that they are confident that the reduction of debt, the delivery of investment strategies and improved competitiveness will continue offering better value for shareholders.
The highlights
Last week Brazilian mining firm Vale reported that its net income in second quarter declined 34% as higher taxes and provisions for probable losses from the burst dam at Samarco subsidiary unit damaged productivity gains. The net income came at $1.11 billion compared to the analysts’ estimates of $1.03 billion for the same quarter.
Net sales fell 5% to $6.63 billion as the average delivery cost of iron ore at the Chinese port of Tianjin plunged 5% in the second quarter over a year earlier. Vale managed to reduce operating costs, which helped to increase gains from mining and other businesses by 29% to $1.27 billion.
Brazilian mining firm successfully reduced its net debt from the first quarter, and approached closer to completing a new Brazilian iron mine that will help firm to reduce its declining costs even more in the coming period.
The updates
Improved operational performance was challenged by the provision of $1.04 billion for expected losses from the tailings-dam burst at company’s Samarco Mineração SA last November. Profit was adversely impacted by increased social and income taxes. With better operational performance, the company’s adjusted EBITDA jumped 8% to $2.38 billion.
Vale SA (ADR)(NYSE:VALE) reported that the work at its giant SD11 mine is approaching closer to completion, and operations are anticipated to commence by the end of this year.
