Brazil's Vale Posts Record 2Q Iron-Ore Output

RIO DE JANEIRO--Brazilian mining company Vale SA (VALE, VALE5.BR) said Thursday it churned out a record amount of iron ore in the second quarter, as expansion projects at its Carajas complex in the Amazon began to bear fruit.

Vale, the world's largest producer of iron ore, said its output of the steelmaking material surged 13% from a year earlier to 79.4 million metric tons, the most ever for the April-to-June period.

Scant rainfall, the result of a drought that has hurt other sectors of the Brazilian economy, allowed Vale to maximize its production. But the ramp-up of output at a new plant at Carajas--where Vale is carrying out a nearly $20 billion expansion plan to supply the Chinese steel industry--was the main reason for the increase.

Production of iron-ore pellets rose 2.4% to 9.95 million tons, Vale said.

Other segments of Vale's business didn't perform as well during the second quarter.

Output of nickel, of which Vale is the world's No. 2 producer, fell 5.2% to 61,700 tons, as the company was forced to suspend its Copper Cliff smelter in Sudbury, Canada, due to a worker fatality. An environmental accident at Vale's nickel operation in New Caledonia caused production to fall there, as well.

Vale's copper production declined 11% in the second quarter to 81,000 tons, due mainly to maintenance stoppages in Ontario, Canada, and the sale of its Chilean operations.

Vale is scheduled to release its second-quarter financial results on July 31.

Write to Paul Kiernan at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires