RIO DE JANEIRO, May 6 (Reuters) - Brazilian iron ore miner Vale <VALE.N> sees iron ore output rising in this quarter, following operational problems related to rains, helping it reach full capacity this year, a company official said on Thursday.
Jose Carlos Martins, Vale's ferrous metals director, said heavy rains and an accident at a port had cut back production volumes in recent months but company output would bounce back.
"All of these problems had reduced our volumes, but we believe that in the next quarter we can improve our performance," he said during a call with analysts to discuss the company's first-quarter earnings.
Martins said the company expected to boost its planned 30-million-tonne expansion of the Carajas iron mine to 40 million tonnes as a result of new production methods.
"What we learned makes us very comfortable to increase the 30-million-tonne project to 40, because we've learned we can produce the iron ore through dry (methods) instead of washing it,"][I’m not sure what this means—comments?] he said.
That project has been delayed for two years because of problems with environmental licensing, he said.
Martins also said the company had reached deals with clients giving it a $50 per tonne premium on iron pellets over lump ore. Vale receives a $20 to $22 per tonne premium for its Carajas iron ore, which has iron content of 66 percent, over the 62 percent grade often used for pricing[Carajas has the richest iron ore of any mine in the world (#msg-38865647)], he said.
Vale's current capacity is around 300 tonnes per year, which it expects to increase to 450 tonnes by 2014.
Martins said the total investment in the Simandou areas in Guinea, which the company announced last week, could reach $5 billion[#msg-49791267].‹
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