Vale withdraws Moatize coking coal guidance
Brazilian mining firm Vale has withdrawn its 2020 coking coal production guidance of 8mn-10mn t from its Moatize mine in Mozambique because of operational uncertainties caused by the Covid-19 pandemic.
The company did not provide a new figure. The guidance was previously revised downwards from an initial 10mn t.
First-quarter metallurgical coal output rose by 19.1pc from the previous quarter to 983,000t, despite bad weather conditions that made production challenging. But output was down by 6.5pc from 1.05mn t in the first quarter last year.
A more stable processing plant at Moatize resulted in improved yields in January-March, but the company warned that this rate of production is not sustainable as mine and port inventories build up because of reduced coal demand.
Steel producers across the world, including in Europe, India, Japan, South Korea and China, are cutting production as downstream steel demand slows because of the Covid-19 outbreak.
Vale has also been forced to postpone its three-month maintenance plan revamp at Moatize indefinitely because of transportation restrictions on people and equipment. The maintenance plan was expected to increase coal output to as much as 15mn t/yr.
By Dylan Wong
source: Argus Media
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