By Paul Kiernan 

RIO DE JANEIRO--Brazilian mining giant Vale SA reported a net loss in the fourth quarter as iron-ore prices fell by nearly half, the local currency weakened and impairment charges continued to pile up.

Vale, the world's largest iron-ore producer, reported a fourth-quarter loss of $1.85 billion, compared with a year-earlier loss of $6.45 billion. Six analysts surveyed by local newswire Agência Estado had expected a narrower loss of $740 million.

Other key barometers of Vale's business health continued to deteriorate as the company's efforts to increase output of key commodities like iron ore, nickel and copper could only partially offset falling prices. Slowing economic growth in China has weighed on global demand for metals, while major mining firms have continued to ramp up production from projects they planned at the height of the commodity boom.

In a video posted to the company's website, Chief Financial Officer Luciano Siani described "a very challenging scenario." Vale sold its iron ore for an average price 45% less than a year earlier.

Vale's sales fell 31% to $9.07 billion, even as it churned out record volumes of several commodities. Earnings before interest, taxes, depreciation and amortization, or Ebitda, tumbled by two-thirds to $2.19 billion due to lower prices and dividends from affiliates, and as cost-cutting efforts stalled.

Further hurting results, Vale wrote off almost $2 billion in fertilizer, iron-ore, coal and nickel assets during the quarter. Some of the write-offs, such as $1.05 billion charge on Vale's fertilizer business in Brazil, were attributed to weaker markets, while another was related to a revoked mining concession in Guinea. The write-downs were partially offset by a $1.62 billion impairment reversal at the Onça Puma nickel facility in Brazil.

For all of 2014, Vale's Ebitda fell 41% to $13.35 billion, the lowest figure since the 2009 global recession. Because cash flow wasn't enough to cover Vale's $4.2 billion in dividend payments and $11.98 billion in capital expenditures, the company has been seeking to cut costs, find partners and sell assets.

Mr. Siani said those efforts will intensify going forward.

"For 2015 we have optimized and revised down our capex plan and are intensifying our corporate simplification and cost cutting efforts, while accelerating the divestment and partnership initiatives to unlock value and build the foundations for strong free cash flow generation by 2017 onwards," Mr. Siani said.

In recent quarters, Vale's management has vowed not to budge on two key goals: keeping debt low and staying the course with a massive expansion of its Carajás iron-ore complex and related infrastructure in the Brazilian Amazon.

The latter project, known as S11D, promises vast quantities of ultra-high-quality iron ore and is seen as key to Vale's long-term competitiveness against rival miners in Australia--located much closer to Chinese customers. But S11D won't reach full capacity until the end of 2018 and is expected to cost $16.36 billion, a hefty price tag considering the current environment.

"The S11D project in the south range of Carajás is untouchable," Chief Executive Murilo Ferreira said in a conference call with journalists. "We need to do it. We like the project for its quality, for its volumes, for its conditions. But we want to be recognized world-wide as the company that brings the best ore to the market."

Ratings agency Standard & Poor's last month downgraded Vale to BBB+ from A-, with a stable outlook. Days later, the company slashed its annual dividend payment to $2 billion, an eight-year low, in a bid to preserve cash amid the uncertain outlook for prices.

Analysts say the company could face more tough choices in the months ahead.

Paul Gait, an analyst at Sanford C. Bernstein in London, said low commodity prices will make it harder to get a good value from the asset sales and partnerships Vale hopes to close this year. There will be fewer potential buyers, and the proceeds will likely be lower and "therefore less helpful in closing the free-cash-flow gap."

"All other things being equal, they have to take on more debt," Mr. Gait said. "And the actions that they can take to prevent that happening look increasingly challenging."

Mr. Siani said that at current iron-ore prices around $64 per ton, Vale will have enough cash to make it through 2015 thanks to a deal it closed in December to transfer a share of its Mozambique coal and logistics projects to Japan's Mitsui & Co. That transaction is expected to allow Vale to avoid cash outflows of up to $3.65 billion.

Mr. Ferreira said Vale will have additional opportunities to sell assets this year, including one potential deal in March. He didn't provide further details.

"I would say we're confident," he said.

Write to Paul Kiernan at paul.kiernan@wsj.com

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