By Paul Kiernan
RIO DE JANEIRO--Brazilian mining giant Vale SA is considering an
initial public offering of a minority stake in its base metals
division, as it hopes to "unlock" value amid an uncertain outlook
for iron ore, Chief Executive Murilo Ferreira said Tuesday.
Company executives have said in recent quarters they expect a
drastic improvement in the division's earnings following higher
prices and recently finished projects to increase nickel and copper
output.
Earnings before interest, taxes, depreciation and amortization,
or Ebitda, in the segment stood at $1.94 billion in the first three
quarters of this year, compared with $1.64 billion in all of
2013.
Jennifer Maki, executive director of Vale's base metals
division, said in a presentation to investors Tuesday that Ebitda
in 2015 is expected to reach between $4 billion and $6 billion.
Better prices for nickel and ramp-ups of Vale's nickel and copper
operations are seen driving profitability next year.
Mr. Ferreira, however, said the share sale isn't certain.
"I am not considering to sell a minority stake through an IPO at
any price, just in case of having a fair price," Mr. Ferreira
said.
Vale also said it plans to reduce investment in 2015 for a
fourth consecutive year amid slumping prices for iron ore and other
commodities.
Vale, the world's biggest iron-ore producer, said it plans to
invest $10.17 billion next year on projects and sustaining
operations. That is down from an initial forecast of $14.8 billion
of capital spending in 2014, a figure that executives recently said
would be cut by $1 billion to $2 billion.
Investors had expected investments of around $10.5 billion,
according to the average estimate in a survey of analysts by the
local Agencia Estado newswire.
Write to Paul Kiernan at paul.kiernan@wsj.com
Access Investor Kit for Vale SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=BRVALEACNOR0
Access Investor Kit for Vale SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=BRVALEACNPA3
Access Investor Kit for Vale SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US91912E1055
Access Investor Kit for Vale SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US91912E2046
Subscribe to WSJ: http://online.wsj.com?mod=djnwires