Vale says in position to rethink asset sale pace to bring down debt

|About: Vale S.A. (VALE)|By:, SA News Editor

Improved iron ore recovery and price realization may help Vale (VALE -5.9%) generate $2.2B next year in free cash flow and accelerate debt reduction plans, CEO Murilo Ferreira tells investors.

Ferreira and other company execs expect the announcement soon of several, unnamed asset divestitures that could help Vale trim net debt to $15B-$17B next year.

"The key message is that we are in a much more comfortable position to be very thoughtful about... divestitures," CFO Luciano Siani says.

Cost-cutting efforts are helping to ease Vale's capital spending needs for the years ahead, as the company says it is lowering its budget for planned investments to $4.5B next year and $2.9B in 2021 from an expected $5.6B this year.

For next year, Vale expects to produce 360M-380M metric tons of iron ore, with a target of 400M-450M metric tons in 2021.

Vale also says it hopes to restart operations in mid-2017 at its Samarco joint venture with BHP Billiton, which has been shut down since a fatal tailings dam failure in November 2015.