trending Market Intelligence /marketintelligence/en/news-insights/trending/zLhaGknyeVTBcKsga4V5sg2 content esgSubNav
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us
In This List

Vale cutting FY'16 CapEx to US$5.5B, confirms steel JV stake sale

Industry Top Trends 2021: Metals and Mining

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020

Vale cutting FY'16 CapEx to US$5.5B, confirms steel JV stake sale

confirmed April 4 that it is selling its entire 26.87% stakein the Companhia Siderurgica do Atlântico, or CSA, for a symbolic price plus theassumption of outstanding debt to venture partner ThyssenKrupp AG.

Underthe deal, the existing iron ore sales and purchase contract between both partieswill remain intact along with an earn-out clause, which entitles Vale to potentialincome originating in the event of a controlling stake sale in CSA to a third party.

Meanwhile,all shareholder agreements, other operating contracts between Vale and CSA willbe terminated. The company noted that this transaction will not materially impactits financial statements.

In addition,the Rio de Janeiro-based company slashed its planned CapEx for 2016 to US$5.5 billionfrom the previously announced US$6.2 billion and also lowered compensation for topmanagement and board members by 9.8% year over year to US$24 million, Mining.comreported, citing a report published at Noticias de Mineracao.

The paycuts follow a US$7.3 million reduction in bonuses for board members.

The companyexpects cash flow to exceed CapEx in the coming years, despite lower commodity prices,as it has already completed major work on expansion projects such as the US$14 billionS11D iron ore projectin Brazil.

Valewill continue noncore asset sales this year, targeting about US$4 billion to US$5.5billion in proceeds, while it will evaluate transactions involving core assets withan aim to reduce net debt by US$10 billion by 2017.

Noncoreassets sales will include a coal joint venture, a precious metals steaming deal,as well as the sale of seven very large ore carriers, its stake in and energyassets.