Vale S.A. - ADR

Strong Production Performance: Vale reported iron ore production of 328 million tons in 2024, the highest since 2018, and above original guidance. The company successfully shifted its sales mix towards higher-quality products from Carajás, increasing realized iron ore premiums and margins. In base metals, copper production reached its highest since 2020 driven by Salobo's record output.

Cost Efficiency and Guidance: The company achieved all of its production and cost guidance for 2024, with iron ore C1 cash costs at $22 per ton, hitting the low end of guidance. In Q4, C1 costs fell to $18.8 per ton, the lowest since 2022. This strong control over costs enhances Vale's competitive position and is expected to continue in 2025 with a reduced CapEx guidance of $5.9 billion.

Dividends and Shareholder Returns: Vale's Board approved a $2 billion dividend, translating to a 10% annualized yield. Additionally, a buyback program for up to 3% of outstanding shares was extended, indicating strong confidence in cash flow generation despite challenges posed by cash disbursements related to environmental commitments.