February 16, 2017 / 11:32 AM / a year ago

UPDATE 1-Brazil's Vale produced record 349 mln tonnes of iron ore in 2016

(Adds production detail)

BRASILIA, Feb 16 (Reuters) - Brazilian miner Vale SA said on Thursday it produced a record 349 million tonnes of iron ore in 2016, above its own guidance, helped by strong performance at mines in northern Brazil and the successful start of its new S11D mine.

The world’s largest producer of iron ore had forecast that output would be at the lower end of a range of 340-350 million tonnes.

Vale said it produced 92.4 million tonnes in the fourth quarter, up 4.5 percent on the same period in 2015. Full-year production rose 1 percent on the previous year.

The company said it had continued to halt or reduce higher cost tonnes from its mines in the southeastern state of Minas Gerais, offsetting them with cheaper production from northern Brazil where its costs are lower and quality higher.

The S11D mine is Vale’s largest ever iron ore project and is located in the Amazon, neighboring the company’s other mines in the northern Brazilian state of Para.

Guidance for 2017 remained at 360-380 million tonnes, Vale said, adding that by the end of 2018 it expected to reach an annual production rate of 400 million tonnes.

Vale reported nickel production of 311,000 tonnes in 2016, 7 percent higher than in 2015 and a company record, after stronger performance at plants in Canada and New Caledonia.

Reporting by Stephen Eisenhammer; editing by Jason Neely and Jane Merriman

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