Vale to add 10 million tonnes to iron ore capacity

Vale plans to restart three pelleting plants in Brazil that have been idle for several years: the Sao Luiz plant with a capacity of 7 million tons per annum in mid-2018 and two smaller plants, Tubarao I and II, possibly as early as 2018.

“The pellet market is very strong,” said Vale CEO Peter Poppinga during a discussion on third-quarter earnings. "Demand has been robust as producers strive for productivity and raise steel prices."

The largest miners Vale and BHP Billiton produce 30 million tonnes per year. The Samarco joint venture has been suspended since the end of 2015, and lost production has delayed global shipment.

The relaunch of three idle units will increase Vale's iron ore concentrate production capacity to 60 million tonnes per annum from approximately 50 million tonnes per annum, including its plant in Oman.

With the additional capacity, Vale plans to change its ratio of iron ore production from its current 55% blast furnace and 45% DR pellets to 55% DR and 45% blast furnaces within two years.