Vale reaffirmed on Thursday that it plans to restart three pelletizing plants in Brazil that have been idled for several years: the 7 million mt/year Sao Luis plant in mid-2018, and two smaller plants, Tubarao I and II, possibly in early 2018.
"The pellets market is very strong," Vale's ferrous minerals and coal executive director, Peter Poppinga, said during a third-quarter earnings call Thursday. "Not just because of Samarco's stoppage, but because demand has been robust, with [steel] producers seeking productivity and putting steel prices upwards."
Production at Vale and BHP Billiton's 30 million mt/year Samarco JV has been suspended since late 2015 after a tailings dam collapse, and the lost output has tightened global pellet supply. Restarting the three idled plants would boost Vale's pellets production capacity to close to 60 million mt/year, from some 50 million mt/year today, including its Oman plant.
With the additional capacity, Vale said it plans to shift its pellet production mix from the current 55% blast furnace and 45% direct-reduction pellets to 55% direct-reduction and 45% blast furnace pellets within two years.
