Despite weak price, Vale maintains production target

By Brigida Ernestina Elu Wea

IDX-listed integrated nickel mining firm PT Vale Indonesia Tbk said it will maintain its 2016 production target of 80,000 tons despite the current weak commodity price.

Vale Indonesia Chief Financial Officer, Febriany Eddy said on Friday that the company will be consistent in meeting production target as there are commitments to the buyer that must be fulfilled.

?For other commodities, when prices are down, they usually reduce production. For us, this does not apply because of the nature of our business which is capital intensive where fixed cost is huge, so we have to produce. We also don?t have marketing risk, because what we produced have been contracted to a single buyer,? she explained.

In the first quarter of this year, nickel production fell to 16,894 tons from 17,476 tons in the corresponding period of last year. Meanwhile, average selling price was also lower at US$6,608 per ton, compared to $11,745 per tons in the first quarter of last year.

Febriany said that the lower first quarter production was related to plant shutdown. She said that the company will accelerate production in the following quarters in a bid to meet the full-year target.

To help cope with the current weak price, she said that PT Vale will continue efficiency programs.

Editing by Reiner Simanjuntak