The world’s largest iron ore producer Vale issued Q1 statement. The iron ore demand and the price declined owing to the global economic recession, the company net profit is U.S.$1.36bln in Q1 2009, dropped 33% compared with the same period of last year’s U.S.$2.02bln.

It is reported that the company Q1 pre-tax profits for depreciation amortization (EBITDA) sank to U.S.$2.28bln form U.S.$3.7bln last year. Due the significant shrinkage of iron ore demand, Vale cut 10% iron ore production about 30mln tons and shut down six pelletizing plants, accounting for pellet ore total capacity of 1/3.

At the same time, Vale also cut staff members more than 1,300 in December last year and re-organized 5,500 staffs to pay leave from December last year to March this year.

Vale said the company’s exports to Asian set a record in Q1, which mainly relies on the supply contract signed with many small and medium sized steel enterprises of China during this period. According to statistics, China iron ore imports broke a record again in April, reaching 53.5mln tons.

However, Vale overall iron ore outputs sank 37% in Q1 m-o-m and pelletizing plant production sharply dropped 73%.

The insiders of industry expressed that due to the serious shrinkage in European market, Vale transferred the originally products for Europe to Asian market especially China market and made Q1 sales high.

Find More Mining News : - - -