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, Jun. 16, 11:27 AM
- A restart date for the Samarco iron ore operation in Brazil jointly owned by Vale (VALE -0.2%) and BHP Billiton (BHP -2.3%) has been delayed until next year, the company's head of human resources tells Reuters.
- Samarco says the lack of clarity of when the company would receive the necessary licenses to restart operations has forced it to begin laying off more than 1,000 workers.
- The delay adds pressure to Samarco’s ability to continue to solely fund the massive clean-up from last November’s tailings dam failure; Vale says would not financially support Samarco if the venture is unable to resume operations this year.
Mon, Jun. 13, 10:20 PM
- Vale (NYSE:VALE) says a Brazilian judge has dismissed a 20B reais ($5.7B) civil lawsuit seeking environmental and property damages for last year's Samarco mine disaster which killed 13 people.
- Brazil's National Humanitarian Society (Sohumana) had filed the lawsuit before a federal judge in Rio de Janeiro in December.
- Samarco and its partners, Vale and BHP Billiton (NYSE:BHP), already had reached a settlement with federal and state governments to pay 20B reais over 15 years to cover and repair damages, which was approved by a court last month.
Fri, Jun. 10, 2:16 AM
- Brazil's police have accused mining firm Samarco, a joint venture between Vale (NYSE:VALE) and BHP Billiton (NYSE:BHP), of willful misconduct in relation to its dam burst last November that killed 19 people and polluted hundreds of miles of rivers.
- "Don't call it an accident," they said, requesting formal charges against eight company officials.
- Federal prosecutors are also carrying out a separate investigation into the human toll after police recommended charges of "qualified homicide."
Thu, Jun. 9, 2:02 PM
Wed, Jun. 8, 5:40 PM
Wed, Jun. 8, 7:50 AM
- Vale (NYSE:VALE) raises $1.25B from an overseas bonds issue, reinforcing the return of Brazilian companies to the international debt markets after the country's deep economic recession and political turmoil had kept companies away.
- Vale issued bonds due in June 2021 that will pay an annual yield of 5.875% to investors,and attracted a demand worth $4B from investors, WSJ reports.
- The miner says it plans to use the proceeds for general corporate purposes, including paying down debt.
Tue, Jun. 7, 5:36 PM
Fri, Jun. 3, 11:47 AM
- Vale (VALE +6.7%) CEO Murilo Ferreira is in the cross-hairs of some members of acting Pres. Temer’s Democratic Movement Party, Bloomberg reports.
- Temer himself is not believed to be among those calling for Ferreira's head, but some members of his administration are said to have considered Vale’s response to last year's tailings dam disaster as tepid in contrast with a more active approach by Australian partners BHP Billiton.
- Former Vale executives Jose Carlos Martins and Tito Martins are seen as potential CEO replacements.
- Pedro Parente recently began has new job as CEO of state-run Petrobras; Vale is a private sector company, and politicians and executives associated with Vale’s controlling shareholder group want to at least avoid giving the impression of interfering in its affairs.
Thu, Jun. 2, 10:35 AM
- Iron ore has lost nearly all of 2016's gains, as ore with 62% content fell another 0.5% to $48.18/dry metric ton after posting the biggest monthly loss in about five years in May, which has left prices that topped $70 in April less than $5 above 2015’s year-end level.
- Inventories at China’s ports rose to 100.65M tons last week, the highest since December 2014,and holdings have expanded for eight of the past nine months, just ahead of the period when steel demand usually sees a seasonal slowdown.
- “Demand remains weak and supply is still increasing. There’s a good chance prices will end the year lower,” Shenhua Futures analyst Wu Zhili tells Bloomberg.
- Relevant tickers: VALE, BHP, RIO, MT, CLF, TCK
- Now read Goldman sees iron ore headed back to $35 as glut returns
Tue, May 31, 7:37 AM
- Brazil Transparency Minister Silveira, whose job is to fight corruption, resigned yesterday after leaked recordings indicated he tried to subvert the government's corruption probe.
- In the recordings, Silveira criticizes prosecutors in the Operation Car Wash probe focused on Petrobras (NYSE:PBR), which has implicated dozens of politicians and led to the imprisonment of top executives, and advises the president of the Senate on how to dodge the investigations.
- Last week, the Planning Minister took a leave of absence after another recording appeared to catch him talking about the need to slow down the investigations.
- Relevant tickers: BBD, BSBR, ITUB, GOL, VALE, EBR, CPL, CIG, ERJ
- ETFs: EWZ, BRF, BRZU, EWZS, BZQ, BRAQ, BRAZ, UBR, DBBR, FBZ
Thu, May 26, 3:30 PM
- Vale (VALE -0.5%) is holding early discussions with bankers about potential sales of stakes in some of its best assets, as it pushes ahead with its $10B debt reduction strategy, Bloomberg reports.
- The miner is evaluating the possible sale of a minority stake in its Brazilian copper operations, all or part of its fertilizer business, and putting more precious metal streams on its mines, according to the report.
- Vale also is said to have floated the idea with bankers about selling a stake in its iron ore business, although getting a fair deal might prove difficult given current weak iron ore prices.
Tue, May 24, 5:35 PM
Mon, May 23, 2:58 PM
- Iron ore prices sink to 10-week lows, following data showing stockpiles at Chinese ports had reached more than 100M metric tons.
- Stronger steel demand in China and supply disruptions in Australia and Brazil were the initial drivers for this year’s surprise advance, but prices have dropped nearly 25% after reaching nearly $69/metric ton a month ago.
- Morgan Stanley analyst Tom Price points to seasonal restocking, Chinese economic policy and the direction of U.S. interest rates as the key drivers of prices, more so than speculative trading activity.
- Iron ore is a major source of profits for the likes of BHP Billiton (BHP +0.9%), Rio Tinto (RIO +0.6%) and Vale (VALE +1.6%), with every $1/ton move in the price impacting earnings by hundreds of millions of dollars.
- "Both BHP and Rio have downgraded guidance for 2017, and we expect that Vale is likely to disappoint in its delivery of S11D [a new iron ore project] as well as its ongoing struggles with the Southern System mines,” Macquarie analysts say.
Fri, May 20, 2:30 PM
- Iron ore stockpiles at Chinese ports have climbed above 100M metric tons, offering further evidence of increased supplies in the world’s top steel consumer that may hurt prices, Bloomberg reports.
- Port inventories rose 1.6% this week to 100.45M tons, the highest level since March 2015, while expanding 7.9% YTD, and are now large enough to cover more than five weeks’ of imports.
- Iron ore with 62% content gained 2.7% to $54.89/dry ton today but have tumbled 22% since peaking at more than $70/ton in April, paring the YTD gain to 26%.
- Goldman Sachs has warned that supply growth will accelerate this year, potentially feeding a glut and driving iron ore as low as $35 during Q4.
- A BHP Billiton (BHP -1.3%) VP of marketing minerals says port stockpiles in China, which have risen this year even as demand rebounded, may continue to increase through the rest of the year; other relevant tickers include Vale (VALE -2.5%) and Rio Tinto (RIO -1.6%).
Thu, May 19, 4:40 AM
- Iron ore mining giant Vale (NYSE:VALE) delivered a stark, three-pronged warning overnight: 1) this year's dramatic run-up isn't fully justified by the fundamentals; 2) watch out as low-cost supply is set to pick up; 3) the company is ready to compete at any price level.
- "We'll have to prepare for tougher periods," Vale's Claudio Alves said. "The price less than one month ago was more than $70. When you come back three months ago, it was $38. This shows there's a big volatility."
- VALE -0.5% premarket
Tue, May 17, 11:48 AM
- Brazil's new Environment Minister says he will not allow the reopening of the Samarco iron ore mine without assurances that the causes and damages of last year's deadly tailings dam collapse were fixed.
- The mine, a 50-50 joint venture between Brazil's Vale (VALE +5.6%) and Australia's BHP Billiton (BHP +3.8%), still needs to secure the necessary permits to resume operations.
- Samarco, Vale, BHP and the Brazilian government, including the environment ministry, signed a 20B real ($5.71B) accord in March to clean up the disaster area and compensate victims, and government and company officials said the mine could reopen by the end of the 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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