Gustavo Pimenta, CEO of Vale—one of the world’s largest iron ore miners—said they have not seen any signs that the war in Iran is negatively impacting global demand for metals. He also noted that the company’s profit margins have widened despite disruptions in raw material shipments caused by the conflict.
Pimenta added that Vale is currently seeking to increase the value of its existing assets rather than pursuing acquisition opportunities. The CEO underlined that global demand for key metals remains exceptionally strong from the company’s perspective and stated that market conditions continue to support its operations.
Disruptions in shipments across the Strait of Hormuz after the conflict in Iran led to increases in fuel costs and freight rates. While this created cost pressures on mining companies, the increase in iron ore prices and growth in sales volumes offset these effects.
To reflect the positive impact of higher iron ore prices since the start of the war in Iran, Vale raised its annual free cash flow estimate for its main iron ore operations by $1.5 billion. Vale expects the average iron ore price to reach $112 per ton this year. This figure is above the $102 forecast under the pre-conflict scenario.
