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Vale Indonesia’s nickel matte output down 20 percent in Q2
Nickel matte production by Vale Indonesia declined nearly 20 percent year-on-year to 15,048 tons in the second quarter due to planned maintenance at its processing plant.
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ublicly listed PT Vale Indonesia, one of Indonesia’s largest nickel-mining companies, has reported a sharp decline in its nickel matte production as a result of maintenance work.
Vale Indonesia reported nickel matte output of 15,048 tons in the April to June period, down nearly 20 percent year-on-year (yoy), due to planned maintenance at its processing plant.
That brought the company’s production in the first half of the year to 30,246 tons, 16.71 percent less than in the same period of last year. The mining firm attributed the drop in output in the first three months to unplanned maintenance and lower nickel grade.
“The [company] maintains its production target [for the full year] at the 64,000 [tons] level, as previously disclosed,” the Vale Indonesia stated in its press release published on Monday.
Last year, Vale produced 72,237 tons worth of nickel matte, slightly below the projected 73,700 tons.
After Vale Indonesia booked declining revenue in 2020, it saw a rebound in its revenue in the January to March period this year with an 18.26 percent yoy increase to US$206.55 million. Its profits rose by 16.36 percent yoy to nearly $33.7 million over the same period.
Nickel prices have risen strongly over the past months as demand for the commodity picked up in line with the boom in traditional industries, such as stainless steel, and emerging industries like electric vehicles.
The commodity changed hands at $18,570 per ton at the London Metal Exchange on Tuesday, up around 40 percent from a year earlier.
Vale Indonesia, which trades on the local bourse under the ticker symbol INCO, posted a 3.27 percent decline in its share price to Rp 5,175 (36 US cents) on Wednesday afternoon from the previous close.
Indonesia, the world’s largest nickel ore producer, currently faces a trade dispute with the European Union over its export bans on certain raw materials necessary for the production of stainless steel, particularly nickel ore, as talks on the matter have made no progress for nearly a year.
Earlier this year, Vale Indonesia reported that it booked more than a 40 percent increase in profit in 2020 as it benefitted from low fossil fuel prices despite making slightly less in revenue than in 2019.
The publicly listed company made $82.82 million in profit in 2020, a 44.28 percent increase from the company’s $57.4 million profit in 2019, Vale’s 2020 financial report shows.
Vale saw its revenue drop 2.2 percent to $764.7 million in 2020 as low nickel prices offset higher production volumes. However, INCO’s cost of revenue was down a sharper 3.6 percent to $640.4 million in 2020 from $664.3 million in 2019.
The miner reduced diesel and heavy sulphur fuel oil (HSFO) consumption volumes last year and also enjoyed low oil prices amid a global energy price crash. Vale’s coal consumption by volume rose but was offset by a sharp dip in coal prices.
Nickel matte prices in 2020 were lower than expected at $10,498 per ton, a decrease from $10,855 per ton in 2019.
Vale spent approximately $152.1 million on capital in 2020, lower than the $166.6 million spent in 2019.
