Brazil's Vale, Cemig create venture for energy assets

Vale (VALE -2.4%) is forming a joint venture with power company Cemig (CIG) to manage some energy assets and to sell part of its stake in the controversial Belo Monte hydroelectric dam in the Amazon forest, part of its efforts to cut costs and focus on its main iron ore mining business.

The JV will comprise Vale and Cemig stakes in six hydroelectric power plants, with a total installed capacity of 1,158 MW.

Vale doesn't disclose the potential value of the assets to be included in the new company, but Cemig says its 45% stake is valued at 2.03B Brazilian reais ($874M).

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Comments (3)
  • petergrt
    , contributor
    Comments (538) | Send Message
    Why isn't this stock at least $20 . . .?


    I read the Barclay's ainalysis - it is full of regurgitated poooop - expecting the iron prices to decline as new productions come on line.


    Just one problem: Check with Caterpillar and Joy and you find that their sales of mining equipment is way down and guiding lower still . . . . .


    I am just venting my frustration with this stock.
    It doesn't matter much as I am in it for a long-hole, and I am happy to just collect the rather healthy dividend, but still . . . .
    20 Dec 2013, 04:20 PM Reply Like
  • gmmpa
    , contributor
    Comments (674) | Send Message
    I am long both these stocks. It seems I need to do a little more work on why I should continue holding them. Why would a mining company own a stakes in hydroelectric assets? I know about the project to divert parts of the Amazon river system through a mountain to generate electrical power for Rio but did not realize that Vale had a financial stake in the project. It may be a good thing to have both companies do a deal to realign their activities back toward their core business models.


    Regarding iron ore commodity demand I am not concerned. When the world gets out of its economic funk, demand will pick up as the charts are starting to show. When the USA joints China and countries elsewhere in the world Vale will be in good shape. I just wish the world experiment with socialism will finally end. I suppose they still have not yet run out of other people's money yet.
    22 Dec 2013, 10:05 AM Reply Like
  • dsalesguy
    , contributor
    Comments (5) | Send Message
    I am surprised as well that Vale has taken this long to turn around. I also own CIG and bought Vale to get on the opposite side of sentiment from the rest. I did not think I would find myself on both sides of a deal like this. I took still think I bought at the right time and will collect dividend and wait for the Dollar to run out its latest attempted rally and loose value to foreign currencies
    22 Dec 2013, 11:38 AM Reply Like
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