VALE

Joint Development Proposal: Vale and Glencore are considering a joint venture to develop a $1.6 billion-$2 billion copper project in Canada's Sudbury Basin, potentially one of the region's most significant copper developments in decades.

Mining Strategy: The companies plan to explore the possibility of jointly mining their underground copper deposits using existing infrastructure from Glencore's idled Nickel Rim South mine.

Production Goals: The proposed 50-50 joint venture aims to produce 880,000 metric tons of copper over 21 years, along with other valuable metals such as nickel, cobalt, gold, and platinum group metals.

Long-Term Partnership: This potential partnership has been under consideration for 20 years and comes at a time of record copper prices, highlighting the strategic importance of the collaboration for both companies.

Iron Ore Price Projections: Analysts predict a slight decline in iron ore prices, with an average of $95/ton in 2026, influenced by increased supply and macroeconomic pressures in China.

China's Demand Weakness: China's manufacturing sector shows persistent weakness, with a contraction in the PMI and declining new-home prices, leading to expectations of reduced iron ore consumption as the country shifts towards less steel-intensive sectors.

Supply Stability and Vale's Strategy: Major iron ore producers maintain stable operations, but Vale SA has lowered its production forecast for 2026 and is adopting a more cautious investment strategy amid market dynamics.

Vale's Copper Ambitions: Vale is shifting focus towards copper, planning to produce 700,000 tons annually by 2035 through a joint venture with Glencore, indicating a strategic pivot in response to the iron ore market outlook.

Iron Ore Production Guidance: Vale is lowering its iron ore production guidance for FY 2026 to 335 million-345 million tons, slightly below the previous forecast, due to slowing global demand and new supply from Africa.

Capital Spending Estimates: The company estimates FY 2026 capital spending between $5.4 billion and $5.7 billion, significantly lower than the previous guidance of $6.5 billion, impacting potential shareholder payouts.

Copper and Nickel Production Forecasts: Vale projects FY 2026 copper production of 350,000-380,000 tons and nickel output of 175,000-200,000 tons, with long-term copper production expected to surge to 700,000 tons by 2035.

Joint Copper Project with Glencore: Vale and Glencore are considering a joint development of a $1.6 billion-$2 billion copper project in Canada's Sudbury basin, aiming to produce 880,000 metric tons over 21 years, coinciding with high copper prices.