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Vale Anticipates Interruption at Onca Puma to Affect Q4 Nickel Output
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Vale S.A. (VALE - Free Report) reported a temporary suspension of operations at its Onça Puma nickel plant due to an outage at the local electricity company's transmission network. It estimates this disruption to impact its nickel production by 1.5- 2.0 kt in the fourth quarter of 2024. Despite this setback, Vale maintained its previously stated guidance of nickel production at 153-168 kt for 2024.
The interruption was caused by damage to the local electricity company's transmission network after strong winds on Oct. 5. The electricity transmission network is expected to be restored by Oct. 15. The company will meanwhile continue to assess the impacts of the interruption on nickel production at Onça Puma. Vale will implement the necessary measures to resume the affected operational processes. It confirmed that there have been no incidents regarding the safety of employees, neighboring communities or its assets at the site.
Vale’s Onca Puma Performance in 2024
In the first half of 2024, Onca Puma’s nickel production was 3 kt, 71.7% lower than 10.6 kt in the first half of 2023. The output at Onca Puma was impacted by the furnace rebuild works that began in the fourth quarter of 2023. After the conclusion of the rebuilding process, metal production at the mine resumed in mid-May. The mine’s production in the first quarter of 2024 was nil and was 3 kt in the second quarter, which was down 47.4% year over year.
Vale’s total production of nickel was down 14% year over year to 67.3 kt in the January-June 2024 period. This reflects the impact of the planned maintenance strategy at the nickel processing plants.
The mine has also faced other headwinds this year. In February 2024, the Pará State Environment Secretariat (SEMAS) suspended the Onca Puma mine's operating license, alleging non-compliance with environmental requirements. Following this decision, Vale filed for an injunction and, on Feb. 26, 2024, Ourilândia’s lower court reinstated the mine’s operating license.
However, on March 1, the State filed an appeal with the Pará State Court, which defered the above decision and the mine’s operating license was suspended. On June 27, Vale informed that it had reached agreements with the Pará State General Attorney's office and SEMAS. The operating licenses for Onça Puma were reinstated.
Vale’s Nickel Production Expectations for 2024
Vale, on Sept. 11, lowered its nickel output expectations. It expects nickel output for 2024 to be between 153 kt and 168 kt, down from the earlier stated range of 160-175 kt. In 2023, it had produced 164.9 kt of nickel. The revised guidance indicates a year-over-year decline of up to 7.2% to growth of up to 1.9%. Vale cited the partial divestment from Vale Indonesia, completed in July, as the reason for the revision in expectations.
Vale’s Nickel Projections
For 2026, Vale expects its nickel production to be between 230 kt and 245 kt, reflecting replenishment projects in Canada, exposure to Pomalaa and Morowali, and the start-up of the second furnace at Onça Puma. As of 2030, nickel production shall be more than 300 kt, with input from projects such as Thompson Ultramafics, Sorowako HPAL, partnership projects and offtake.
VALE Stock’s Price Performance
Vale’s shares have plunged 10.9% in a year, in line with the industry.
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares have gained 136% in a year.
The consensus estimate for Idaho Strategic Resources’ fiscal 2024 earnings is pegged at 72 cents per share. The consensus estimate for earnings has moved up 167% in the past 60 days. It has an average trailing four-quarter earnings surprise of 116.6%. IDR’s shares have soared 247% in a year.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share. The consensus estimate for earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG’s shares have gained 147% in a year.
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Vale Anticipates Interruption at Onca Puma to Affect Q4 Nickel Output
Vale S.A. (VALE - Free Report) reported a temporary suspension of operations at its Onça Puma nickel plant due to an outage at the local electricity company's transmission network. It estimates this disruption to impact its nickel production by 1.5- 2.0 kt in the fourth quarter of 2024. Despite this setback, Vale maintained its previously stated guidance of nickel production at 153-168 kt for 2024.
The interruption was caused by damage to the local electricity company's transmission network after strong winds on Oct. 5. The electricity transmission network is expected to be restored by Oct. 15. The company will meanwhile continue to assess the impacts of the interruption on nickel production at Onça Puma. Vale will implement the necessary measures to resume the affected operational processes. It confirmed that there have been no incidents regarding the safety of employees, neighboring communities or its assets at the site.
Vale’s Onca Puma Performance in 2024
In the first half of 2024, Onca Puma’s nickel production was 3 kt, 71.7% lower than 10.6 kt in the first half of 2023. The output at Onca Puma was impacted by the furnace rebuild works that began in the fourth quarter of 2023. After the conclusion of the rebuilding process, metal production at the mine resumed in mid-May. The mine’s production in the first quarter of 2024 was nil and was 3 kt in the second quarter, which was down 47.4% year over year.
Vale’s total production of nickel was down 14% year over year to 67.3 kt in the January-June 2024 period. This reflects the impact of the planned maintenance strategy at the nickel processing plants.
The mine has also faced other headwinds this year. In February 2024, the Pará State Environment Secretariat (SEMAS) suspended the Onca Puma mine's operating license, alleging non-compliance with environmental requirements. Following this decision, Vale filed for an injunction and, on Feb. 26, 2024, Ourilândia’s lower court reinstated the mine’s operating license.
However, on March 1, the State filed an appeal with the Pará State Court, which defered the above decision and the mine’s operating license was suspended. On June 27, Vale informed that it had reached agreements with the Pará State General Attorney's office and SEMAS. The operating licenses for Onça Puma were reinstated.
Vale’s Nickel Production Expectations for 2024
Vale, on Sept. 11, lowered its nickel output expectations. It expects nickel output for 2024 to be between 153 kt and 168 kt, down from the earlier stated range of 160-175 kt. In 2023, it had produced 164.9 kt of nickel. The revised guidance indicates a year-over-year decline of up to 7.2% to growth of up to 1.9%. Vale cited the partial divestment from Vale Indonesia, completed in July, as the reason for the revision in expectations.
Vale’s Nickel Projections
For 2026, Vale expects its nickel production to be between 230 kt and 245 kt, reflecting replenishment projects in Canada, exposure to Pomalaa and Morowali, and the start-up of the second furnace at Onça Puma. As of 2030, nickel production shall be more than 300 kt, with input from projects such as Thompson Ultramafics, Sorowako HPAL, partnership projects and offtake.
VALE Stock’s Price Performance
Vale’s shares have plunged 10.9% in a year, in line with the industry.
VALE’s Zacks Rank & Stocks to Consider
Vale currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , Idaho Strategic Resources (IDR - Free Report) and IAMGOLD Corporation (IAG - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares have gained 136% in a year.
The consensus estimate for Idaho Strategic Resources’ fiscal 2024 earnings is pegged at 72 cents per share. The consensus estimate for earnings has moved up 167% in the past 60 days. It has an average trailing four-quarter earnings surprise of 116.6%. IDR’s shares have soared 247% in a year.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share. The consensus estimate for earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG’s shares have gained 147% in a year.