Vale sees silver lining in nation's cleanup efforts

China's efforts to reduce pollution are expected to boost demand for Vale's high-quality iron ore, while the Brazilian miner will continuously diversify its business, said Fabio Schvartsman, Vale's chief executive officer.

The nation's continuous efforts to clean up its skies and improve productivity by shutting down smaller polluting steel mills have boosted demand for high-grade iron ore, which represents more opportunities for suppliers of better quality ore like Vale, he said.

"Vale has a very large and very successful iron ore business and the advantage that the Brazilian firm has to offer is the higher proportion of high-quality iron ore, which is very important at this moment for China," said Schvartsman.

"Vale is committed to serving customers in China, the most important country and client for us, in the best possible way and the current challenge and momentum is extremely positive for those in the iron ore business," he said.

The Brazilian miner has developed a brand-new iron ore mine in Carajas, Brazil, that will bring more high-quality ore to the market.

That said, the company is also planning to reduce its excessive dependence on ore exports for growth and would over the long term reduce the share of its overall earnings from iron ore exports.

"We plan to continue to grow in iron ore but will reduce the dependency on iron ore, and make sure the base metals start performing better, especially nickel, copper and cobalt, to have the Carajas unit contribute more to our overall revenues and performance," said Schvartsman.

That's also because of China and its big strides in electric vehicles and the consequent demand for batteries, said Schvartsman, adding that nickel, cobalt and copper production will get a boost from the growth in electric vehicles.

Vale said that it will continue to blend products at ports in China for making required and speedy deliveries to steel mills and also to build up inventories.

The firm is also starting to sell its products in renminbi, making it the only global iron ore company that is selling in the Chinese currency.

"By doing that, we are opening the door for the smaller customers in China that cannot have access to foreign currency to buy iron ore," he said.

According to Schvartsman, the Belt and Road Initiative is a very clever way of using the installed capacity in China and it represents sustainable demand for the likes of Vale.

"We embrace it, actually we are very happy that China initiated that project," he said.