Vale Rules Out Following Glencore Path as Mining Pain Deepens – by Juan Pablo Spinetto (Bloomberg News – September 15, 2015)

The world’s top iron-ore miner is betting that cost cuts and growing market share will be enough to endure low prices, shunning the path of equity sales and halted dividends taken by rival Glencore Plc.

Vale SA, the Brazilian mining giant which is also the largest nickel producer, is focused on reducing expenses further as the start of its lowest cost producing project approaches, Chief Executive Officer Murilo Ferreira told reporters in Belo Horizonte, Brazil, during an industry gathering.

“We aren’t studying a model like the one taken by Glencore, because we don’t consider it necessary for Vale,” Ferreira said, adding that he only has “superficial” knowledge of the operations of the Baar, Switzerland-based trader.

“The Vale team did the diagnosis of the end of the supercycle at the right moment. There was an expressive reduction in Vale’s costs and there is a lot still to come.”

Glencore last week announced a plan to sell as much as $2.5 billion worth of new stock, cut spending and halt dividends in a bid to reduce $30 billion of debt by a third.

Glencore’s billionaire Chief Executive Officer Ivan Glasenberg responded to some investors’ worries that a debt-laden balance sheet can’t withstand the rout in commodity prices.

The Swiss commodities trader and miner said in a statement Tuesday that is selling as many as 1.3 billion new shares as part of the plan.

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