- Investors are taking in stride the massive provisions taken by BHP Billiton (BHP -0.6%) and Vale for last year's Samarco mine disaster, as BHP shares are slightly lower while Vale (VALE +0.3%) is slightly higher.
- BHP says it will record a provision of $1.1B-$1.3B, roughly half the estimated funding needed by the Samarco joint venture under an agreement signed with Brazilian authorities in March, while Vale says it booked a 3.7B real ($1.2B) provision.
- Vale is getting a boost from its Q2 profit report, which shows net income of $1.11B that fell 34% from $1.68B a year earlier but beating the analyst consensus estimate of $1.03B.
- Vale cut operating costs in the quarter, helping to lift profit from mining and other operations by 29% to $1.27B, its net debt fell nearly 1% Y/Y to $27.5B, and trimmed the cost of delivering iron ore.
- Vale also says it has completed 90% of the mine and iron ore processing facilities at the giant SD11 mine at its Carajas complex in Brazil's Amazon, and 92% of rail connections to its main line.