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2 minutes read

Vale Targets Focuses on Iron Ore and Base Metals

Vale projects investments of between US$5.4 billion and US$5.7 billion in 2026, with the majority directed toward its iron ore operations, while reinforcing the medium-term growth potential of its copper and nickel businesses.

Of the projected 2026 investment, approximately US$4 billion will be allocated to iron ore solutions, with the remainder earmarked for base metals, including copper and nickel. This investment level is broadly in line with Vale’s expected capex of around US$5.5 billion in 2025.

From 2027 onward, Vale expects a gradual increase in capital allocation to copper and nickel, reaching around US$2 billion annually. Investment in iron ore is projected to remain in the range of US$3 billion to US$3.9 billion per year.

According to Carlos Daltozo, head of research at investment firm Tuesday Capital, the pace of Vale’s expansion into copper and nickel may appear measured, but this reflects the company’s position as a global iron ore leader, where diversification into other segments naturally occurs more gradually.

Vale’s CEO Gustavo Pimenta emphasized the company’s focus on capital discipline, noting that Vale reduced its estimated capex for the current year by US$1 billion—from US$6.5 billion—through more efficient capital allocation, without delaying or cancelling strategic projects.

Pimenta said Vale will continue to concentrate on segments where it has established expertise—iron ore, copper and nickel—while ruling out expansion into other mining commodities. He highlighted copper as a key growth area, stating that Vale expects to double its copper production over the next decade.

Copper output is forecast to reach 370,000 tonnes in 2025 and 380,000 tonnes in 2026, with potential to rise to around 700,000 tonnes per year by 2035 as new projects come online. Industry experts believe Vale could play a pivotal role in increasing Brazil’s share of global copper production from around 1% today to as much as 2–3% in the medium term.

Key copper growth projects include Bacaba, which has secured a preliminary license and is expected to start up in the second half of 2028 with capex of US$290 million and annual output of 50,000 tonnes. The Alemão project, targeted for start-up in 2030, carries an estimated investment of US$1.6–1.8 billion. Additional copper developments include Salobo, Cristalino, a joint venture with Glencore, Project 118, and Paulo Afonso.

In iron ore, Vale expects production to reach 335 million tonnes in 2025 and 345 million tonnes in 2026, with a longer-term target of 360 million tonnes by 2030. Projects advancing in 2026 include Capanema, with ramp-up planned for the second quarter, and Serra Sul +20, expected to start up in the second half of the year. Vale anticipates continued strong iron ore demand driven by global steel production, with prices stabilizing around US$100 per tonne.

Nickel production is forecast to reach 175,000 tonnes in 2025 and 200,000 tonnes in 2026, with a target of 250,000 tonnes by 2030. However, the nickel segment continues to face challenges from global oversupply and downward price pressures.

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