UPDATE 2-Vale eyes $1 bln in dividends each quarter this year

(Recasts; adds iron ore price expectations, dividend details)

RIO DE JANEIRO, April 26 (Reuters) - Vale SA, the world’s top iron ore producer, expects iron ore prices no lower than $70 per tonne this year and will hand out $1 billion in dividends each quarter this year if conditions remain similar ahead, executives said on Thursday.

The dividend policy “was constructed to work in any price scenario. That means this policy is here to stay,” Chief Executive Officer Fabio Schvartsman said on a conference call, adding that a $1 billion dividend payout was already guaranteed for the second quarter.

The comments came a day after Vale reported a first-quarter slide in profit of 36 percent on higher costs and lower iron ore prices. Vale still promised a minimum payout of $1 billion in dividends for the quarter to be paid later this year.

Vale executives also said they hoped to find a partner for the struggling New Caledonia nickel mine by the end of the year, but it was not clear whether the world’s largest nickel producer would continue nickel operations there.

Executives said they were not satisfied with nickel prices, but said that the metal would become an industry motor when electric vehicles become a reality.

Vale has struggled over its presence in the nickel segment, where prices have yet to pick up because of oversupply, despite the metal’s key role in lithium-ion batteries that are used in electric cars.

Over-budget and years late when it started up in 2010, the New Caledonia project, located on a Pacific island, accumulated nearly $1.3 billion in losses from 2014 to 2016.

However, thanks to higher nickel and cobalt prices, the company posted $28 million in first quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) at the mine, its best showing ever.

In December, Vale dialed back nickel output forecasts for the following five years even as it praised the metal’s future prospects.

On Thursday, Vale said it was curbing base metal production to boost returns, though the world’s biggest nickel producer hopes the area will one day represent a greater part of earnings.

Vale, also the world’s largest iron ore producer, said it will not flood the market with ore from its Carajas mine, adding that the S11D mine would double production this year over last thanks to its continuing ramp-up.

Vale’s high-quality ore is seen commanding strong demand in China, which aims to curb pollution fanned by making steel from lower-quality ore. (Reporting by Marta Nogueira and Alexandra Alper; editing by Chizu Nomiyama, Phil Berlowitz and Jonathan Oatis)