PT Vale Indonesia and its subsidiaries (the Group) announced their unaudited performance results for the Q3 of 2024 (3Q24). PT Vale’s production in 3Q24 and the nine-month period of 2024 (9M24) demonstrated positive performance, reaching a total of 18,008 metric tons (t), marking a 9% increase compared to the previous quarter and 52,783 t, or a 2% year-on-year increase.
This positive result can be attributed to an increase in the average nickel ore grade from mining operations, which reached 1.79% (+4% compared to 2Q24), supported by enhanced calcine output generated from prioritizing work scope and optimizing maintenance time at the company’s processing facilities.
Alongside the production increase in 3Q24 and 9M24, PT Vale recorded a 1% quarterly and 6% yearly increase in nickel matte shipments, indicating an improvement in operational performance during the period.
"Regarding nickel matte production at our Sorowako operations, we are optimistic about reaching the target of approximately 70,800 t by the end of 2024. We also intend to make our first ore sales in the fourth quarter of this year (subject to approval of the revised RKAB)," said PT Vale’s Chief Financial Officer, Rizky Putra, in a press release on Wednesday (October 30, 2024).
Despite challenges, particularly from continued price declines in 3Q24, the company posted revenue of USD 229.8 million for the quarter.
The average realized price was USD 12,948 for the quarter and USD 13,262 per ton for the nine-month period, reflecting a 9% and 29% decline compared to the average realized prices in 2Q24 and 9M23, respectively. Meanwhile, the cost of revenue in 3Q24 slightly increased by 2% compared to 2Q24 but decreased by 3% in 9M24 compared to the cost of revenue in 9M23.
In the Q3 of 2024, HSFO consumption increased by 11% compared to the second quarter, offset by lower coal consumption due to a 14-day maintenance of coal milling facilities. During this period, HSFO and coal prices rose by 5% and 9%, respectively, while diesel prices fell by 6%.
PT Vale reported an EBITDA of USD 46.9 million for the Q3 of 2024, down from USD 72.4 million in the second quarter. This decline was primarily due to lower realized nickel matte prices and the one-time effect of coal milling maintenance in September, which led to higher HSFO consumption to replace coal use.
Additionally, following the issuance of our Special Mining Business License (IUPK), PT Vale began accumulating obligations for Non-Tax State Revenue (PNBP) in the form of a 10% profit share, totaling USD 3.6 million for the 3Q24 period. However, fulfillment of this obligation awaits confirmation from the Ministry of Energy and Mineral Resources (ESDM).
“After the divestment was completed in June, the Company is currently undergoing a separation process from Vale Base Metal, involving one-time costs. However, we are conducting a comprehensive transition to ensure a smooth and efficient process. Furthermore, we continue to improve the competitiveness of our Sorowako operations with a cash cost per unit of revenue that remains competitive at USD 9,536 per ton in 9M24," stated Rizky Putra.
As of September 30, 2024, the company’s cash and cash equivalents stood at USD 771.2 million, down from USD 832.1 million as of June 30, 2024. In the Q3 of 2024, PT Vale invested USD 82.4 million in capital expenditures, up from USD 61.0 million in the second quarter. This increase was mainly directed toward growth projects for future mine development.
PT Vale also announced a significant achievement in its sustainability journey, with a revised ESG (Environmental, Social, and Governance) risk rating of 29.4 from Sustainalytics, placing the company in the Medium ESG Risk category. This marks a substantial improvement from the previous classification.
Notably, PT Vale has become the only Indonesian nickel company in the sector to achieve a medium-risk category, further demonstrating its leadership in ESG performance within the nickel mining sector.
Additionally, the Company received the Subroto Award, the highest honor awarded by the Ministry of Energy and Mineral Resources, in the community development and empowerment category. This award highlights the Company’s dedication to addressing social issues by utilizing its expertise and resources.
"The Company remains committed to prioritizing productivity improvement and cost efficiency, ensuring long-term competitiveness while adhering to good mining practices. Our goal is to enhance lives and transform the future together," concluded Rizky Putra.
