Vale CEO Says Rising Costs Make 10% of Iron Ore Unprofitable

Vale CEO Gustavo Pimenta announced that surging energy and freight costs, driven by conflict in the Middle East, have made approximately 10% of the global iron ore supply unprofitable. This represents roughly 160 million tonnes of annual supply operating at a loss, with 15 million tonnes already removed from production.

Pimenta suggests these production cuts by high-cost producers could trigger a price recovery. Iron ore futures in Singapore recently fell below $90 a tonne, a decline attributed to weak Chinese demand and new supply entering the market from the Simandou mine in Guinea.

Regarding the political climate in Brazil, Pimenta expressed confidence in the mining sector's stability ahead of the October 25 presidential runoff. He noted that both candidates, Senator Flavio Bolsonaro and President Luiz Inacio Lula da Silva, support strengthening the industry through regulatory reforms and faster permitting.