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Vale CEO says no big acquisition on agenda, sees partial Samarco restart by 2020

Vale SA CEO Fabio Schvartsman said the company does not plan to chase big acquisitions, given its opportunity to grow organically in nickel, the Financial Times reported Oct. 16.

The executive said recently that the company would use excess cash to boost shareholders' returns, as it met its target of halving net debt to US$10 billion.

Schvartsman said big dealmaking "adventures" were not part of his agenda, and any acquisitions would be small bolt-on deals, possibly in iron ore.

"We don't need to do it given the potential of our nickel business," the executive said.

Vale is largely known for its iron ore business. It also ranks as the world's biggest nickel producer, a key material used in the production of batteries for electric vehicles, along with cobalt and lithium.

However, the Brazilian mining major will only move forward with the development of its large nickel reserves in Indonesia if the metal's price reaches US$20,000 per tonne. The current price is US$13,000 per tonne.

Vale will keep its iron ore output at 400 million tonnes, which will only see an increase to 450 million tonnes if there was a major disruption in the market, Schvartsman said.

The company recently reaffirmed its 2018 iron ore output forecast at about 390 million tonnes and about 400 million tonnes from 2019 onward. In the third quarter, the company broke the 100 million-tonne production milestone, reaching a record 104.9 million tonnes.

Vale's CEO also noted that the Samarco iron ore mine in Brazil could restart production at a third of its capacity by early 2020, noting that there is indication that "all issues will be overcome" by then, Reuters reported in a same-day release.

The company's Samarco Mineração SA joint venture with BHP Billiton Group has been suspended since the 2015 tailings dam collapse that led to 19 fatalities.

Mike Henry, BHP's president of operations for minerals Australia, said in early October that the company was not on the "cusp" of the Samarco restart, with several steps needed to be taken first.

Schvartsman, who was appointed Vale CEO in 2017, said he would be pleased to serve another two-year term as the miner's head.