In Q1 of 2012, coal output was 2.4 million tonne, versus 2.7 million tonne in the previous quarter, reflecting the effects of the rainy season and geological problems in Australia. However, production rose 65.4% on a year-on year basis, mostly due to the ramp up of Moatize.

Metallurgical coal production was 4.0% lower than 4Q11, but achieved the best performance ever for a first quarter. Thermal coal output decreased 19.7% quarter-on-quarter while expanding 31.1% year on year.

Moatize, the first phase of the Moatize coal project, in Tete, Mozambique, is ramping up production. In Q1 of 2012, 501,000 tonne of hard coking coal and 193,000 t of thermal coal were produced.

Output composition is converging to the normal planned mining split of 80% metallurgical coal and 20% thermal.

Production of metallurgical and thermal coal at Integra Coal, in Australia, was 124,000 t and 81,000 tonne, respectively, in 1Q12. Metallurgical coal output was negatively impacted by geological failure issues throughout the quarter. Open cut mining operations were restricted by above average seasonal rainfall in New South Wales.

Carborough Downs, whose production is 100% metallurgical coal, decreased its output to 325,000 tonne in Q1 of 12 from 514,000 tonne in Q4 of 2011. The performance was a consequence of poor geological conditions during most of the quarter in the section where the longwall mining was taking place. However, when compared to Q1 of 2011 Carborough Downs production increased by 40.6%, achieving the best performance for a first quarter.

El Hatillo, our thermal coal mine, reached a production of 848,000 t, 22.2% lower than 4Q11, due to the coal seams and geological conditions.

Source - Vale

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