Brazil Samarco Pellet Output Back At 2008 Levels - Estado
August 19 2009 - 2:11PM
Dow Jones News
Brazil's Samarco Mineracao S.A. is now producing iron ore
pellets at the same rate as the first half of 2008, the Estado news
agency reported Wednesday.
The return to full output was due to a recovery in demand from
Asian steel mills, Samarco President Jose Tadeu de Moraes said.
Samarco is jointly owned by Brazilian mining giant Vale S.A.
(VALE) and its global competitor, Australia's BHP Billiton
(BHP).
In June, Samarco said it would likely only sell 14 million tons
of pellets this year.
Moraes said the strongest demand came from Indonesia, Malaysia
and China.
Asia accounts for 40% of Samarco sales followed by the Middle
East with 28% to 30%, Moraes said. Europe accounted for 18% and the
Americas 12%.
The recovery in Europe was slower than in Asia, Moraes said.
The company has an iron pellet production capacity of 21.6
million metric tons.
"If we have a little bit of luck, we could end up selling around
the same amount as last year," said Moraes. Last year, Samarco
produced 16.2 million tons.
"I believe the worst of the crisis is already over, but this
good period may be down to the rebuilding of inventories abroad,"
he said.
However, the apparent pellet-demand recovery wasn't enough for
Samarco to expand production capacity with a new 8 million ton
unit. "With the crisis, that decision should only be made in 2010,"
he said.
Samarco exports all its production and has between 10 and 15
clients, each with a demand of over one million tons a year.
-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086;
John.Kolodziejski@dowjones.com