New chief of Brazil’s Vale aims to halve debt – by Neil Hume (Financial Times – November 5, 2017)

Fabio Schvartsman says he wants miner to become ‘results orientated’

The new head of Brazil’s biggest private company Vale has said the miner must halve net debt to less than $10bn if it wants to become a “results-orientated” company.

In an interview with the Financial Times, Fabio Schvartsman said reducing debt was his number one priority and that there was a better chance of restarting the Samarco iron ore mine — the site of Brazil’s biggest environmental catastrophe and which it owns 50:50 with BHP Billiton — if Vale were able to take control.

“If we are at the $10bn level, it doesn’t matter what happens with commodity prices,” said Mr Schvartsman. “Vale will be in a very sound position to do everything that is necessary.” The company’s current market capitalisation is $53bn.

Vale is the world’s top producer of steelmaking ingredient iron ore. Along with its peers, it spent billions of dollars when commodity prices were high on ambitious projects and deals in an attempt to take advantage of China’s seemingly insatiable appetite for raw materials.

As a result, the company’s debt ballooned to dangerously high levels, reaching almost $25bn. Mr Schvartsman said Vale’s net debt, currently $21.1bn, could drop below $10bn next year if commodity prices hold and the company is able to keep costs and spending under control.

For the rest of this article: