Yet this write-down was surpassed by the $500 million impairment loss over Vale’s stake of the controversy-prone Simandou iron ore project after the Guinea government revoked its licence in April.

“We recognised a partial impairment at Simandou of $500 million as discussions with the government of Guinea are advancing towards the recognition of and some sort of compensation for Vale's investments made in the country,” Vale said.

Vale’s coal division reported an adjusted earnings before interest, taxes, depreciation and amortisation loss of $154 million in the June quarter – an $8 million improvement from the $152 adjusted EBITDA loss of $162 million in the previous quarter.

While there are considerable infrastructure challenges ahead with Vale’s Moatize coal operations in Mozambique, the Carborough Downs longwall mine in Queensland’s Bowen Basin had a good quarter.

“Total coal output in 2Q14 [was] 2.2 million tonnes, 23.8% higher than in 1Q14, mostly due to the stronger performance of Carborough Downs, after the longwall move in the previous quarter,” Vale said.

On its move to put the Integra open cut and underground operations on care and maintenance in the recent quarter, Vale said the mine was not economically feasible under current market conditions.

Vale suspects there will be more difficult times ahead if metallurgical coal prices remain depressed.

“When prices fell further to the $120 per tonne level, nearly all US producers began to trim output, followed by a number of Canadian and Australian mines,” Vale said in its coal market outlook.

“In this scenario, more closures are expected to follow if prices do not rebound in the next few quarters.”