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Vale sees huge losses amid stronger oil, coal prices in 2017
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A worker walks past bags of minerals belonging to mining company PT Vale Indonesia in Sorowako, South Sulawesi, in this undated picture. (JP/Ruslan Sangaji)
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ublicly listed nickel miner PT Vale Indonesia recorded a net loss of US$15.27 million in 2017, a significant fall from its net profit of $1.9 million booked in the previous year.
Vale, a local subsidiary of Brazilian mining giant Vale SA, saw revenue increase by 7.73 percent year-on-year to $629.3 million last year as a result of a 10 percent increase in the selling price of nickel.
However, Vale also saw a 13.2 percent increase in operating costs to $622.78 million following rising prices of fuel and coal used in its operations. This dragged down the company’s bottom line.
“The cost of fuel and coal increased by 36 percent and 39 percent respectively on a unit cost basis. These two consumables represent Vale’s largest costs,” Vale president director Nico Kanter said on Tuesday in a statement.
Throughout last year, Vale used 1.63 million barrels of high sulfur fuel oil and 370,613 tons of coal in its operations, up 5.24 percent and down 3.37 percent respectively.
“This experience underlines the importance of remaining focused on optimizing production capacity, improving efficiency and reducing costs. We believe nickel prices in 2018 will remain volatile,” Nico said.
Meanwhile, Vale saw production fall slightly last year to 76,807 metric tons of nickel matte compared to the 77,581 metric tons it booked in 2016. (bbn)
