- The Brazilian prosecutors’ argument linking the Samarco disaster to the BP oil spill does not hold up, and Brazil does not have the same stranglehold on Vale (VALE +3%) and BHP Billiton (BHP +0.1%) as the U.S. had on BP, Bernstein analyst Paul Gait says.
- Investors were surprised this week by the $44B damages claim over last year's deadly tailings dam collapse at the Samarco mine because BHP and Vale reached agreement on a much smaller settlement in March, but Gait believes those worries are overdone.
- For example: The U.S. could have banned BP from the domestic oil market, as BP’s sales to U.S. consumers accounted for a third of company revenue, but Vale’s sales to Brazilian customers account for 7.5% of revenue and BHP’s domestic sales only 1.6%.
- Now read Vale: Crippling debt but modest potential