Brazilian mining giant Vale has reported increased net operating revenue driven by higher copper prices, despite maintaining flat production levels. For the quarter ending June 30, Vale's net operating revenue rose by 3% year-on-year to $9.9 billion, bolstered by improved performance in its iron ore segment.
Net income surged more than threefold to $2.7 billion, following Manara Minerals' acquisition of a 10% stake in Vale Base Metals for $2.5 billion. Copper production remained unchanged at 78,600 tonnes compared to the previous year, yet net revenues soared by 45% to $779 million.
Adjusted earnings in the copper segment increased by 49% to $351 million, attributed to a 31% rise in average realized copper prices, which reached $9,202 per tonne, alongside robust operational performance at the Salobo project in Brazil.
In contrast, nickel production fell by 24% to 27,900 tonnes, with revenue declining by 28% to $879 million. Adjusted earnings for nickel dropped by 54% to $108 million, influenced by a 19% decrease in realized nickel prices, which averaged $18,638 per tonne, due to lower prices at the London Metals Exchange and reduced sales volumes from planned maintenance at nickel processing plants.
Cobalt production halved to 320 tonnes, with the average realized price decreasing by 19% to $28,258 per tonne.
Analysts at Jefferies noted that if Vale continues to meet its operational targets, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) could grow from approximately $17 billion in 2024 to around $20 billion by 2026. They highlighted that the most significant impact on earnings will come from iron ore prices, which are expected to decline, while Vale is well-positioned to benefit from increased volumes across all segments and higher copper prices.
