VALE Posts Strong 2025 Output: Can Expansion Drive Future Gains?

Vale S.A VALE delivered a strong operational performance in 2025, with iron ore, copper and nickel production exceeding expectations. Iron ore and copper output reached the highest levels since 2018, while nickel production was the strongest since 2022.

Iron ore production for the year was around 336 Mt, up 2.6% year over year and above the company’s latest guidance of 335 MT. Copper output rose 9.8% to about 382 kt, above the expected 370 kt. Nickel production was roughly 177 kt, 10.8% higher year over year, exceeding expectations of 175 kt.

Vale targets iron ore production capacity at 335-345 Mt in 2026, with plans to increase it to 360 Mt by 2030. Key projects supporting this expansion include Vargem Grande 1 (VGR1) and the Capanema Maximization project, each expected to add approximately 15 Mt per year of capacity. Additional initiatives, such as Compact Crushing at S11D and Serra Sul, are also expected to enhance capacity beginning in the second half of 2026.

Vale is also investing heavily in the base metals business to capitalize on the global energy transition. Copper production is projected at 350–380 kt in 2026, increasing to 420–500 kt by 2030 and reaching 700 kt by 2035. These projections imply a 7% CAGR over 2024-2035 compared with the 4% average for peers.

Projects such as Bacaba will extend the life of the Sossego Mining Complex, contributing an average annual copper output of 50 kt per year over an eight-year mine life. Production is expected to start in the first half of 2028. Other projects, such as Salobo Coarse Particle Flotation (CPF), Alemão and Cristalino, will increase Vale’s copper production capacity.

Vale recently signed an agreement with Glencore Canada (Glencore) to jointly evaluate a potential brownfield copper development project at their adjacent properties in the Sudbury Basin, with an expected start-up in 2030. The company plans to hit 700 kt levels by 2035, primarily through the accelerated development of assets in the North and South hubs in the Carajás region.

For 2026, Vale expects its nickel production to be between 175 kt and 200 kt, supported by replenishment projects in Canada, exposure to Pomalaa and Morowali, and the start-up of the second furnace at Onça Puma. For 2030, nickel production is anticipated at 210-250 kt, with input from projects such as Thompson Ultramafics, Sorowako HPAL, partnership projects and offtake.

Peer Rio Tinto Group RIO reported iron ore production at Pilbara (100%) at 327.3 Mt in 2025, flat year over year. Shipments totaled 326.2 Mt, down 1% year over year, coming near the lower end of the guidance of 323-338 Mt. Total iron ore sales guidance for 2026 is at 343-366 Mt, with Pilbara (100% basis) at 323-338 Mt.

Rio Tinto’s copper production was 883 kt in 2025, up 11% year over year, higher than the company’s guidance of 860 – 875kt. For 2026, copper production is projected at 800 – 870kt.

BHP Group BHP reported iron ore production of 134 Mt, up 2% year over year in the first half of fiscal 2026 (ended Dec. 31, 2025). BHP Group projects iron ore production at 258 – 269 Mt in fiscal 2026. BHP’s copper output was 984 kt, flat year over year. Copper production is projected at 1,900 – 2,000 kt for fiscal 2026.

Vale’s Price Performance, Valuation & Estimates

Vale shares have gained 68.6% in the past year compared with the industry’s 65% growth.

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Vale is trading at a forward 12-month price/sales multiple of 1.72X, lower than the industry’s 1.79X.

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The Zacks Consensus Estimate for Vale’s 2026 earnings is pegged at $2.10 per share, suggesting 15.4% year-over-year growth. The same for 2027 indicates growth of 2.3%.

Here is how the EPS estimates for 2025 and 2026 have been revised over the past 60 days.

Image Source: Zacks Investment Research

Vale currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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