Vale considers slowing production

Vale of Brazil, the world's largest iron ore miner, has announced it is willing to temporarily slow exports, which other sources have suggested could start a rally in iron ore prices.

Vale's head of ferrous and strategy, Peter Poppinga, has said the company would be prepared to withhold about 30 million tonnes from its higher-cost mines if the weak market persisted.

"We are optimising our production mix and this is an ongoing endeavour to improve our margins," Poppinga said. "Depending on the market, we will be prepared to reduce our production by 30 million tonnes. This does not mean necessarily closing down mines, we are just optimising production flows.

"Some mines have processing plants that we can perhaps stop for a while. So in a nutshell, we are not prepared to reduce overall capacity but rather reduce production temporarily."

Poppinga hinted that any such reductions would be temporary and opportunistic, and Vale would increasingly be focused on profit margins rather than volume growth.