Mining Giant Vale Powers Up Output, Takes Multi-Billion Dollar Hit
VALE S.A. stock declined Friday after the company reported a fourth-quarter loss of 90 cents per share, compared with analyst expectations for a 60-cent profit.
Meanwhile, net operating revenue rose 9% year over year to $11.06 billion, exceeding the consensus estimate of $10.999 billion.
Pro forma EBITDA rose 17% Y/Y to $4.8 billion in the quarter on a higher contribution from Vale Base Metals.
Vale's underlying (proforma) profit rose sharply to $1.5 billion in the fourth quarter, up 68% from a year ago, mainly due to stronger operating performance and currency-related gains that boosted last year's comparison.
However, the company ultimately reported a $3.8 billion net loss for shareholders. The loss was largely driven by major one-time charges, including a $3.5 billion write-down on its Canadian nickel assets after lowering long-term price expectations, and a $2.8 billion tax-related write-off. Higher provisions tied to the Samarco legal case also weighed on results.
Capital expenditures rose 15% Y/Y to $2.0 billion in the quarter. As of December 31, cash and cash equivalents stood at $7.37 billion.
Key Metrics
The company produced 90.4 million tonnes (Mt) of iron ore, which was higher 6% Y/Y, led by strong performance at Brucutu and the continued ramp-up of the Capanema and VGR1 projects.
Meanwhile, Copper production grew 6% Y/Y to 108.1 kt, the highest quarterly production since 2018, thanks to all-time-high production at Salobo and consistent operational performance at Sossego and Canadian polymetallic assets.
Meanwhile, the company’s Nickel production came in at 46.2 kt, up 2% Y/Y, on the successful commissioning of Onça Puma’s 2nd furnace and Voisey’s Bay underground mines ramp-up.
Sales from Iron ore rose 5% Y/Y, copper grew 8% Y/Y, and nickel surged 5% Y/Y in the quarter.
The average realized iron ore fines price rose 3% Y/Y to $95.4/t led by an increase in iron ore reference prices. Iron ore fines all-in costs rose 5% Y/Y to $55.5/t in the quarter.
Copper reported all-in costs of $-881 per tonne for the quarter, while nickel all-in costs fell 35% Y/Y to $9,001 per tonne, led by strong by-product credits and operational efficiency gains across both businesses.
Executive Commentary
Gustavo Pimenta, CEO, said, “In 2025….In our operations, we reached the highest iron ore and copper production levels since 2018 and delivered double digit production growth in nickel. This strong operational performance was supported by improved asset reliability and the successful ramp up of key growth projects, like Capanema, Vargem Grande, VBME and Onça Puma.”
“As we enter 2026, we remain focused on operational excellence, sustainable growth through initiatives such as the New Carajás Program, and on delivering superior long-term value for all our stakeholders.”
Outlook
Vale expects iron ore production of 335-345 Mt for fiscal 26 and targets to produce ~360 Mt by 2030.
Also, by 2026, the company anticipates all-in cost to reach $52-56/t, led by lower C1 cash cost on efficiency gains and increased production along with a more flexible product portfolio.
VALE Price Action: Vale shares were down 0.76% at $16.91 during premarket trading on Friday.
Photo by SERGIO V S RANGEL via Shutterstock
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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