Vale Base Metals targets $5 billion in pre-tax earnings in 2026
Key Facts
Vale Base Metals aims to raise its pre-tax earnings to $5 billion in 2026, compared with about $1.3 billion in 2024, Chief Executive Sean Osmar said in Toronto on November 9. The target is three times the level recorded two years earlier, highlighting the unit’s efforts to boost returns from its copper and nickel businesses. Osmar announced the target at the Canadian Institute of Mining, Metallurgy and Petroleum’s Capital Projects Symposium. The company linked its ambition to broad cost cuts, changes to operational accountability and higher copper prices. The target comes as the unit works to recalibrate capital spending and improve the expected returns from development projects.
Results for 2025 show operational and financial improvement at the unit. Copper production reached 382,300 tonnes, up 10% from 2024, while nickel production reached 177,200 tonnes, up 11% year on year, according to Vale Base Metals’ 2025 asset guide. Copper output was the highest since 2018, while nickel output reached its highest level since 2022, the Northern Miner reported. Adjusted earnings before interest, taxes, depreciation and amortization reached $3.283 billion in 2025, up 151% from 2024. That adjusted operating earnings measure differs from the $5 billion pre-tax earnings target, so the annual result is not a like-for-like basis for direct comparison.
The financial backdrop reflects a shift from cash-flow pressure toward breakeven. The unit said it came close to cash-flow breakeven in 2025, after recording negative cash flow of $2 billion in 2024. Osmar added that Vale Base Metals generated more than $1 billion in free cash flow during 2026 through the report date of November 9. In the third quarter of 2026, adjusted earnings before interest, taxes, depreciation and amortization rose 61% year on year to $1.1 billion. Free cash flow for the quarter was $484 million, compared with $20 million in the third quarter of 2025, according to the company’s operating and financial results.
Realized copper prices helped support performance in the third quarter. The unit’s average realized copper price rose 56% year on year to $15,314 per tonne, exceeding the 44% increase in the benchmark price on the London Metal Exchange, the Northern Miner reported. In quarterly production, the unit produced 85,000 tonnes of copper, down 6% from the year-earlier period, and 50,000 tonnes of nickel, up 6%. The figures show a divergence between rising nickel output and falling copper output for the quarter, despite the higher realized price for the latter. Vale said 2026 copper and nickel production is on track for the upper half of its target ranges.
The returns improvement plan includes cutting expected capital spending on the development project portfolio by more than 30%, while raising expected returns from the low-to-mid-teens range to more than 20%, Osmar said. He said the unit redesigned an existing Brazilian project that was expected to cost more than $500 million initially, with the new design requiring close to half the original capital investment. This points to project management’s focus on reducing capital requirements and raising expected returns before execution. Osmar also said some projects that had been planned for the 2040s were brought forward to the early 2030s. The company is linking the rescheduling of projects with improved investment efficiency across its development portfolio.
In the near term, 2026 production guidance targets the upper half of a range of 360,000 to 380,000 tonnes for copper and 185,000 to 200,000 tonnes for nickel. At the project level, Vale Base Metals expects production from the Salobo coarse particle flotation project to begin in the first half of 2028, a year ahead of schedule. Further out, Vale says copper production could reach 420–500,000 tonnes a year by 2030, then about 700,000 tonnes by 2035. These targets set out an expansion path beyond the 2026 earnings goal, with continued reliance on development projects to increase copper output. The announced guidance and timelines provide a framework for production growth in the coming years.