Vale’s narrow escape from Argentina
When Dilma Rousseff emerged from a meeting with Argentina’s Cristina Kirchner last Thursday, saying that Vale would soon reach an agreement over its $6bn Rio Colorado potash project in the country, some feared the worst.
Local media took it as a sign that she wanted the Brazilian miner to stick by the cash-draining mine, which Vale ditched in March after rampant inflation and exchange rate controls doubled the project’s costs. Continue reading »
Argentina to Vale: my way or the highway
Argentina’s government might as well be humming Frank Sinatra’s “My Way”.
After lambasting Vale’s “unilateral” decision to dump a $6bn potash project in Argentina, it seems to be entertaining the idea of stripping Vale of the concession and piloting the project itself, probably bringing in new partners. (Mubadala, an Emirates investment and development has been mentioned in the media as has an unnamed Canadian-Australian company.) Continue reading »
[updated] Is it curtains for one of Argentina’s biggest foreign investments in years?
Vale, the Brazilian miner, has not entirely pulled the plug on its $6bn Río Colorado potash project in Argentina. But after a board meeting on Monday it said the project was definitely not coming out of the freezer – where it has been since December – any time soon. Continue reading »
Vale: going for quality, not quanity
Photo: Bloomberg
The weather gods have been kinder to Vale than to Brazil’s government, it seems. Low rainfall across Brazil at the end of last year may have dried up the country’s reservoirs and brought it to the brink of an energy crisis this month. But it has done wonders for Vale’s production.
The miner on Friday posted better-than-expected iron ore output for the fourth quarter, partly as a result of lighter rainfall than normal in the Amazonian state of Pará where the company’s vast Carajás mining development is located. Continue reading »
Vale: chipping away at the assets
Vale is wasting no time getting on with its cost reduction plan. As most people were still emerging from a post-Christmas stupor, the Brazilian mining company this week announced another two assets up for the chop. Continue reading »
Vale – bearer of bad Q4 tidings
This week just keeps getting worse for Vale.
After warning shareholders on Wednesday of unexpected tax charges of $448m, the Brazilian mining giant stunned the market late on Thursday with news of a $4.2bn writedown on its nickel and aluminium assets. Continue reading »
For Vale, the taxman cometh
If you think you’ve had a bad day, spare a thought for poor old Vale.
The Brazilian mining giant on Wednesday announced tax losses of nearly R$1bn ($483m) relating to cases in Brazil and Switzerland.
Early in the morning, Vale said it had settled a dispute with the Swiss authorities over what it called “differences in interpretation” of the federal tax breaks granted to Vale’s international business in 2006. While the company had already set aside $37m for the Swiss claim, it said it would now have to pay almost six times that amount – 212m Swiss francs ($232m). Continue reading »
Brics: risky businesses
What price a reputation? Earning a good one takes time. Losing it can take a moment. So some of the biggest companies based in Brazil, Russia, India and China may not be pleased to read a report issued this week by RepRisk, a consultancy that calls itself “the leading provider of business intelligence on environmental, social and governance (ESG) risks”. Continue reading »
Vale’s Guinea mining headache
It would have been easy to miss. On page 18 of Vale’s 38-page results presentation released late on Wednesday, the mining company gave the following information about the status of its project in Simandou, Guinea: Scope and schedule under review.
It looks like a minor detail, but in reality it was Vale’s own special way of saying that it was putting on hold its $1.3bn Zogota mine in Simandou, the west African country’s richest iron ore deposit. The mine was meant to have started output by the end of 2012. Continue reading »
Vale: more tax woes
It’s another one of those very Brazilian tales – the saga of Vale and the unpaid royalties.
The mining company has been at loggerheads with the tax authorities for years over disputes about unpaid levies. However, the negotiations seemed to take a turn for the worse on Tuesday after Vale announced it would set aside an additional R$1.1bn ($542m) to cover potential losses. Continue reading »
Vale: no need to panic
Brazil’s Vale is nothing but optimistic.
The mining company’s net income slumped almost 60 per cent to $2.66bn in the second quarter from the year earlier – the worst results in two years.
The chief financial officer has just announced this week he is resigning and global iron ore prices have fallen to a nine-month low as Chinese growth slows.
But no need to panic, apparently. Continue reading »
Vale cashes out of Colombian coal
Vale is not wasting any time slimming down its operations, it seems.
On Monday the company announced it had sold its Colombian thermal coal assets for $407m to Goldman Sachs’ Colombian Natural Resources. Continue reading »
Vale: Lean, mean mining machine?
Photo: Bloomberg
When Murilo Ferreira took over as the chief executive of Vale about a year ago and promised more efficiency nobody paid much attention.
Firstly, it’s the kind of thing CEOs like to say a lot. Secondly, investors at the time were far too busy being alarmed about the circumstances that put Ferreira in that position. Would the government continue to steer the company according to its needs? Continue reading »
Vale “very concerned” about $6bn project in Argentina
Will the nationalisation of YPF be good or bad for investment in Argentina? For those in doubt, here’s one sign that the answer is “bad”. Vale, the Brazilian mining giant, is preparing a review of its $5.9bn Argentine potash project to be presented to its board next month, Bloomberg reports.
“We are very concerned about the political situation and their whole environment in Argentina,” Bloomberg reported Murilo Ferreira, chief executive, as saying in a conference call with analysts. Vale is not alone. Continue reading »
State-owned EM cos: more value than you think
Emerging market equity investors may not always like the smell of state control, fearing that the interests of minority shareholders may be hijacked by activist governments, but as Morgan Stanley showed in a recent research note, state-owned companies have overall outperformed their private counterparts in recent years.
Indeed, they have done much better. The 122 members of the MSCI Emerging Markets index that have state ownerships of 30 per cent or more have beaten the index by a cumulative 260 per cent since January 2001, and by 33 per cent since late October. Continue reading »
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