How are you viewing this extraordinary dividend story with your leverage, which is now at the upper side of your tolerance, let’s say? Those are the two questions. Thank you very much.
Eduardo Bartolomeo: Okay. Go ahead, Mark. Mark, you’re on mute.
Marcello Spinelli: Try again.
Mark Cutifani: How’s that?
Eduardo Bartolomeo: Okay. I copy you.
Mark Cutifani: Okay. Gustavo made the observation on copper, around Salobo’s improvement, and that was very encouraging flowing into the first quarter coming off a strong last quarter as well. And, that pointed to a few changes that were made over the last six or nine months. And, we’ve had similar, albeit, lagging performance at Sudbury because we did the asset review in Sudbury about three months after Salobo. And, Eduardo pointed to the 7% improvement at Clarabelle. On a run rate basis, it’s closer to 15%, and that reflects both copper and nickel. So, I think we’ve got good trends at two of the most important operations. Indonesia remains fairly solid. Onça Puma is coming through the furnace rebuild and is heating up.
And, what we are flagging is a likely intention, to push some of that feed north to try and improve the premiums on products we receive. And so, it’s not simply about operations, it’s also. and that’s a long way to go and a lot of improvement to come, but it’s also about price realizations. And, with the price volatility, and what we think will be a premium related to the products that we produce from Canada, we think there’s still a lot of potential on both the cost side and on the pricing side that we’re looking at. And, with the volatility we’re seeing in the nickel market, what we don’t want to do is start cutting production where we’re already seeing material reductions in operating costs, and we think there’s a real premium.
So, we want to give it another two or three months, and that’s what we want to reflect and show you in June. So, we still think there’s a two stories playing out. The operating improvement plus premiums that we can get by using our flow sheets better filling Matsusaka, doing more work at clinic, and making sure we’ve got all the molecules heading in the right in the right direction. So, it’ll be a story in two parts, and I think, we’ll be able to show that in June that we’re looking at both operating cost and, margin improvements as well on the pricing side.
Gustavo Pimenta: Thanks, Mark. And, I will take the second one. Apologies also to Rafael that we haven’t responded for the first question on the extraordinary dividend potential. Look, as you know, it depends on several elements. Certainly, market conditions have improved lately, which give us, some good expectations of potential cash generation through year-end. But, we also compare those vis-a-vis where we are on the leverage ratio, minimum cash, provisions, and outflows. So, I think it’s early and we think it’s early to point out to potential, incremental dividends, but we’ll certainly assess that through year-end. And, if there’s any opportunity we will certainly consider with our Board as we always do. And, we’ve been doing this consistently over the last several years.
Operator: Next question from Myles Allsop with UBS.
Myles Allsop: Hi, there. Yes, a couple of questions. First of all, on iron ore. Obviously, a very strong first quarter. The guidance for 2024, either looks conservative or you have some concerns about potential operating challenges later this year. I mean, should we look at the guidance as conservative or other things we should bear in mind for later in the year? And, then maybe secondly, on the nickel side, a question for, Mark. I mean, the challenges in the nickel market are driven by Indonesia, and obviously, Vale’s contributing to those incremental tons. And, what’s the latest with the, Indonesian projects? And, is there any desire to slow those back to try and rebalance the market? Thank you.
Carlos Medeiros: Hi, Myles. This is Carlos Medeiros. It’s too early days to review our 2024 guidance. We had a quite good Q1, but still there are challenges as we see ahead. And, we had also a very strong second half of the year last year. So, this is why we prefer to maintain our guidance. And, if we decide to revisit it, it will be done later in the year. Meanwhile, we’re still working on the usual levels to increase production, initiatives such as our seasonality plan that has proved to be robust, the reliability initiatives to continue to improve the overall equipment availability, our mining plans to review the mine’s, geometries, whatever necessary to free up more ore. And, also in the hydrogeology initiatives to make sure that our water balance in our mines, offers additional opportunities to access the bottom of the pit, earlier during the year. So all-in-all, we’ll keep it for now, and we might get back to you later. Thank you.
Mark Cutifani: Yes, Myles, on the nickel side. On the question on Indonesia, I think the first thing to recognize is the divestment, announcements and milestones that were achieved were very positive. And, certainly we moved through that fairly quickly with the Indonesian government, so credit to everybody involved. Second point, funds on [Palma] (ph) have been committed, as per the requirements, and we’re still working through the early phases of that. In terms of the commitment on new projects, again, we’re very mindful of our obligations with our partners. But at the same time, we’re also making the point that we need to be prudent and consider the individual investment propositions very carefully. There is a little bit of uncertainty in the marketplace regarding how different products will be priced in the market.
Great news for us in Canada is that it’s likely we will do better than most, because of the nature of the material and, the low carbon footprint. Indonesia will probably be in a very different conversation, and we’re working with our partners just to make sure we understand that and what that means for each of the investments. And, again, we’re also mindful of the fact that we need to pace those additions with the market as well. But, again, it’s an open conversation with our partners. It’s still early in that process, I have to say. So, we’ve got a bit more work to do.
Operator: Vale team, ready for your next question? Next question from Timna Tanners with Wolfe Research.
Timna Tanners: Hey. Good morning. I want to dive down a little more into cost if you could please, whatever the recent voluntary and kind of what prices would be great to hear that can do to manage the cost side, this quarter can you give us an update, what your thoughts despite the progress [indiscernible] can you give us an update on and what’s your thoughts on how to model the purchase side? That’s my first question. The second is just an outlook on the premium.
Eduardo Bartolomeo: Timna, sorry. It’s getting crunched. Could you speak it, could you ask it again?
Timna Tanners: Sure. Is that any better?
Eduardo Bartolomeo: Yes. A little bit.
Timna Tanners: I’m sorry. Just asking for any outlook on cost given the loss of price volatility and any guidance for third-party purchase cost. Anything you can do to obtain cost overall on the higher cost side.
