Is It Time To Bottom-Fish For Vale SA?
Stephen Simpson, CFA • 41 Comments
Stephen Simpson, CFA • 41 Comments
Vale... Ya? Not Yet. Still Reckless, Not Contrarian.
Andres Allende, CFA • 33 Comments
Andres Allende, CFA • 33 Comments
Thu, Jul. 21, 7:49 AM
- Vale (NYSE:VALE) +1.3% premarket after announcing Q2 iron ore production of 86.8M metric tons, higher than the 77.5M metric tons in Q1 and slightly above analyst expectations but below the record 89.3M tons produced in the year-ago quarter.
- Vale’s expansion goals in the face of a global supply glut appear highly attainable as the company plans to ramp up H2 production at the S11D mine in Carajás, the industry's biggest development project.
- Carajás achieved a Q2 production record of 36.5M metric tons, up 15.5% Y/Y, mostly due to the increase in the overall equipment efficiency of the truck fleet and the ramp-up of the N4WS and N5S extension pits.
Thu, Jul. 21, 3:45 AM
- A Brazilian state law to ban upstream tailings dams, the design responsible for Samarco's disaster in November, could be approved this year, Minas Gerais' environmental regulator told Reuters.
- Anderson Silva de Aguilar also said the iron ore mine, which is co-owned by Vale (NYSE:VALE) and BHP Billiton (NYSE:BHP), would not be resuming operations this year and may not in 2017 either.
Wed, Jul. 20, 5:42 PM
Thu, Jul. 14, 8:39 AM
- BHP Billiton (NYSE:BHP) says production at its Samarco iron ore joint venture with Vale (NYSE:VALE) is unlikely to restart this year, as the clean-up continues following last year's fatal dam collapse at the mine.
- BHP says Samarco's operations will restart only when it is safe to do so and when all regulatory approvals are granted.
- BHP also says Samarco is in talks to cut its workforce by ~40% to match expected lower production levels.
- Samarco has been closed since last November's tailings dam burst unleashed a mudflow that killed 19 people, left hundreds homeless and polluted a major river.
Tue, Jul. 12, 9:24 AM
Mon, Jul. 11, 8:49 AM
- Record iron ore shipments moved through Australia's Port Hedland terminal in June, as BHP Billiton (NYSE:BHP) and Fortescue Metals (OTCQX:FSUMF) operated near full capacity and inventories rose at Chinese ports.
- Port Hedland shipments to China rose to 34.5M metric tons in June from 31.7M metric tons in May, breaking the previous record of 33.9M in March; total iron ore shipments from the port jumped to 41.8M metric tons in June, also a record, from 39.4M in May.
- Rising production amid a drop in Chinese steel production led Australia's government on Friday to cut its iron ore price forecast, citing concerns over slowing growth in demand.
- Other relevant tickers include RIO, VALE and CLF.
Wed, Jul. 6, 7:46 AM
Fri, Jul. 1, 6:38 PM
- Vale (NYSE:VALE) and BHP Billiton’s (NYSE:BHP) Samarco mining joint venture is seeking capital injections from its owners as it likely runs out of cash by August after last year's deadly tailings dam accident, Bloomberg reports.
- Samarco already has started exploring ways to restructure ~$1.6B in bank loans and may seek to put off bond payments until it can resume operations, according to the report.
- The JV’s debt is not guaranteed by its owners, which reportedly do not intend to make payments on the company’s behalf.
- Brazil’s Superior Court yesterday issued an interim order reinstating a $6.2B civil claim against Samarco, which Vale and BHP plan to appeal.
Fri, Jul. 1, 9:14 AM
- Vale (NYSE:VALE) agrees to sell three bulk carriers to a Chinese-led consortium for $269M, Bloomberg reports, as the world’s biggest iron ore miner seeks to strengthen its balance sheet.
- The vessels, to be delivered in August, reportedly have a capacity of 400K metric tons.
- Vale is known to be negotiating the sale of other vessels as it seeks to raise as much as $5B from non-core assets this year.
Fri, Jul. 1, 3:37 AM
- BHP Billiton (NYSE:BHP) is appealing the decision by a Brazilian court to reinstate a $6.2B public civil claim over last year's Samarco iron ore mine disaster.
- BHP and joint-venture partner Vale (NYSE:VALE) had agreed on a $2.3B settlement in March, but Brazil's Superior Court responded to an appeal from the Federal Prosecutor's Office by issuing an interim order suspending its ratification.
Tue, Jun. 28, 11:31 AM
- Morgan Stanley raises its iron ore outlook for this year and next, saying the top suppliers in Australia are managing the addition of new supply and steel demand in China will remain supported.
- The firm ups its overall 2016 forecast by 17% to $46/metric ton and its 2017 outlook by 13% to $42, according to its quarterly forecasts, although its revised call of $35/ton for the final three months of this year indicates its view that prices are still expected to drop below last year’s trough.
- Stanley says it is possible that the two biggest miners in Australia, BHP Billiton (BHP +2.5%) and Rio Tinto (RIO +2.5%), are “adjusting” the addition of new supply to accommodate weaker market conditions.
- Also: VALE +5.9%, CLF +4.5%.
Wed, Jun. 22, 5:36 PM
Mon, Jun. 20, 9:16 AM
Mon, Jun. 20, 8:01 AM
- BHP Billiton (NYSE:BHP) Vale’s (NYSE:VALE) Samarco mining joint venture in Brazil is exploring ways to restructure ~$1.6B in loans after last year's deadly tailings dam accident halted output, Bloomberg reports.
- While Samarco’s dollar-denominated bonds do not start maturing until 2022, the mine probably will not be able to service all of its obligations as it struggles to resume operations, according to the report; so far, it has not missed any payments.
- On Friday, Brazilian authorities fined Samarco 143M reais for damage to the coastal environment, a wildlife refuge and a biological reserve in Espirito Santo state.
Fri, Jun. 17, 7:29 PM
- Bloomberg reports VALE is "holding discussions with Asian mining companies about a potential sale of a minority stake in its Brazilian iron-ore assets that could fetch as much as $7 billion."
- Vale, the world's biggest iron ore producer, is also reportedly open to streaming deals. Like peers, Vale has been looking to sell assets to pare its debt load. The company has said wants to raise ~$10B by the end of 2017.
- Earlier: Mosaic might buy Vale's fertilizer unit for ~$3B
Fri, Jun. 17, 7:56 AM
- Mosaic (NYSE:MOS) has entered talks to buy Vale's (NYSE:VALE) fertilizer unit for as much as $3B, in a renewed push to grow in South America and Africa, Reuters reports.
- Although the structure of such a deal has not been finalized, one option is a cash-and-stock deal in which Vale would become MOS's biggest shareholder, with a 12%-15% stake depending on the size of the deal's stock portion, according to the report.
- MOS has said it is looking for phosphate or potash assets that could be bargain priced in a weak commodity sector, while Vale is selling assets to help meet a $10B debt reduction target by next year.
Vale SA engages in the production and export of iron ore, pellets, manganese, and iron alloys, which are raw materials needed for steelmaking. It operates through the following segments: Bulk Materials, Base Metals, Fertilizers and Others. The Bulk Materials segment includes the extraction of... More
Sector: Basic Materials
Industry: Steel & Iron
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