UPDATE 2-Vale iron ore output falls; copper, cobalt rise

Wed Apr 17, 2013 8:43pm EDT
 
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* Nickel, coal production rise from year ago

* Copper, cobalt production reach record levels

* Higher prices may ease impact of iron ore decline

RIO DE JANEIRO, April 17 (Reuters) - Iron ore output at Brazilian global miner Vale SA, the world's largest producer of the main steel ingredient, fell 3.5 percent in the first quarter on declining ore quality and license delays at old mines, the company said on Wednesday.

The impact of falling iron ore output was eased by rising production at new and much-delayed projects in Brazil, Canada, Australia and New Caledonia, Vale said in a securities filing.

Nickel and coal output rose and Vale recorded record levels of copper and cobalt production.

Vale has been investing heavily in recent years to reduce its dependence on iron ore which accounts for nearly 90 percent of its profit.

Iron ore output was 67.5 million tonnes, 3.5 percent less than a year earlier and 21 percent below the fourth quarter. Reserves of high quality ore are falling in the company's oldest and most important mining district in Brazil's southeastern state of Minas Gerais, Vale said. Also, new equipment to concentrate ores are not yet ready.

"The first quarter is the weakest of the year as operations are affected by the Southern Hemisphere rainy season," Vale said.   Continued...