|Bid||10.60 x 1100|
|Ask||10.64 x 38500|
|Day's Range||10.62 - 10.66|
|52 Week Range||6.49 - 14.19|
|Beta (5Y Monthly)||1.12|
|PE Ratio (TTM)||91.85|
|Forward Dividend & Yield||0.69 (6.77%)|
|Ex-Dividend Date||Dec. 27, 2019|
|1y Target Est||12.28|
(Bloomberg) -- The decision to keep Chinese factories shut after the Lunar New Year sent shudders through the massive mines of Brazil and Chile that feed them. Now, with China getting back to work and Latin America the new virus hot spot, concern is shifting from demand to supply.Iron-ore shipper Vale SA had a scare last week as it had to fend off an attempt by Brazilian prosecutors to close a complex that accounts for a tenth of its output. A union at copper behemoth Codelco said members are concerned that a still small outbreak of the virus will spread.Alarm bells are starting to ring again in metal markets as the outbreak explodes in Latin America, with the region’s highly urbanized population of 600 million accounting for about 40% of daily deaths globally. That’s coming at a time when Chinese demand is recovering and markets tighten. Chile is the top exporter of copper and Brazil is the second-largest shipper of iron ore.“Mine supply problems from Covid-19 in Latin America are far from over yet,” Wenyu Yao, senior commodities strategist at ING Bank, said by phone from London. “Chile is a big unknown now.”So far, mining heavyweights like Vale and Codelco have managed to continue operating through the outbreak, adopting safety measures without stalling output. Other mines in the region that did shut are now reopening. But the industry has been helped by relatively low rates of illness in the wider populations. That’s no longer the case.On Friday, spot iron ore surged past $100 a ton as worries that the pandemic may curb Brazilian supply coincide with sustained, robust demand in top steel producer China. Futures now look set to hit that level, too, with the contract in Singapore advancing for the past four days.Brazil surpassed the U.S. in new coronavirus cases last week, and the disease is now spreading in northern states such as Para, which accounts for 8% of global iron ore supply. In April, Vale cut its shipment guidance due to bad weather and the virus’s impact on operations.The disease has also reached Brazil’s meat-processing industry, with JBS SA ordered to shut operations at a plant in Rondonia state last week in the country’s first beef-facility closure. Brazilian oil has also been hit, with nearly 500 confirmed cases and one death among offshore workers, although production hasn’t been impacted.Compounding Brazil’s health disaster is a potential political crisis. Protesters clashed on the streets of Sao Paulo Sunday and President Jair Bolsonaro joined a demonstration against Congress and the Supreme Court.“The Covid-19 outbreak in Brazil creates tangible risks to iron ore supply over the upcoming weeks, despite mining being allowed to operate as essential business,” Citigroup Inc. analysts including Tracy Liao wrote in a report. “Rising infections among workers may prompt the miners or local authorities to impose more draconian quarantines, which could limit productivity or even close mines.”Meanwhile, port stockpiles of iron ore in China have continued to decline and Chinese steel demand has improved notably over the past two months, reflected by inventory drawdowns. Even though prices may stay elevated for longer, Citigroup maintains its bearish view, forecasting prices to fall to $70 a ton by the end of 2020, with Vale expected to manage the outbreak well.In a response to questions, Vale reiterated annual production guidance of 310 million to 330 million tons, which factors in pandemic risks such as higher absenteeism and the possibility of tighter restrictions in Brazil. The company has also offered financial support to its supply chain and imported health equipment for regions where it operates. Like Codelco, Vale has implemented social-distancing measures, workplace disinfection, screening and testing.It’s a similar story in copper as supportive demand-side data fuels a rebound. On Monday, copper futures reached the highest level since mid-March after manufacturing data from China pointed to a continuing recovery.Chile’s Codelco has managed to keep operating at close to normal rates, helping prevent markets from tightening further. But maintaining output may become more difficult as Covid-19 cases in the country surge. With a population of just 18 million, Chile is reporting new cases on a per-capita basis at a pace comparable to that of Spain at the peak of the spread in March, pushing hospitals toward collapse and prompting authorities to tighten restrictions.Workers at Codelco’s Chuquicamata mine are concerned that the number of infections, while still small, will grow, Miguel Veliz, director of Union No. 3, said by telephone.Fifteen staff members and 34 contract workers have tested positive at the mine, said Liliana Ugarte, who heads Union No. 2. Another 140 people are quarantined, she said.Mine workers began getting sick April 20, with detections accelerating in recent weeks, Veliz said. To be sure, the number of cases is a small fraction of the workforce -- Chuquicamata has 4,000 staffers and 7,000 outsourced workers.In a written response, Codelco said it implemented preventive controls at Chuquicamata that allow it to quickly detect and isolate sick workers and their contacts. Most infections happened outside the mine in rest periods, it said. Chuquicamata is just north of Calama in the Antofagasta region, which has seen a sharp rise in cases in recent weeks.Still, mines typically operate with greater social distancing than, say, meat packers. who have been much harder hit by the virus. Assuming South American mines navigate the pandemic, the copper rally may run out of steam with China’s reopening well-flagged and relations between Beijing and Washington deteriorating.“Risk exists -- like the pandemic emerging in the mining districts,” said BTG Pactual analyst Cesar Perez. “There could be a possibility where the government becomes restrictive, but given how strategic companies have been, the risk of meaningful disruptions to production is still distant for now.”(Updates mine worker infections in 16th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Zacks Industry Rank Highlights: Fortescue Metals and Vale
(Bloomberg) -- Black Cube, the private intelligence agency run by former Israeli spies, spent months setting up companies around the world. Offices, websites and employees were painstakingly put in place -- all part of a sting targeting former executives at Brazilian mining giant Vale SA.The Black Cube operation, made public in a court filing Thursday and described by people familiar with it, represents the latest escalation in a bitter fight between Vale and mining billionaire Beny Steinmetz.What started in Guinea as a partnership in one of the world’s richest mineral deposits has devolved into a globe-spanning dispute that sheds light on how fortunes can be made and lost in the world of African mining.As surging Chinese demand for raw materials spurred a race for assets in Africa, Steinmetz acquired the rights to an iron-ore project known as Simandou in 2008. Vale bought a 51% stake about a year later. Then a new president in Guinea seized the asset back after a corruption probe -- and Vale is pursuing Steinmetz for compensation.While Steinmetz has always denied wrongdoing, he says in the filing that Vale suspected all along that his original acquisition of the assets could have been problematic. Vale has said in court documents it didn’t know.Steinmetz says the sting operation -- detailed in court filings that include a declaration from one of Black Cube’s founders and transcripts of conversations with former Vale executives -- showed the Brazilian company was suspicious before it signed the deal. That undermines Vale’s claim to compensation, he argues.A spokesman for Vale, which was awarded $2 billion in a London arbitration last year that it is still trying to collect, declined to comment.“This report just confirmed what we were saying from day one. Vale knew everything, there was no surprise for them. Now we have the full proof of that. I was happy to see that, because until now we were fighting and no one believed us,” Steinmetz said in an interview with Bloomberg News this week. For almost a decade, Steinmetz has faced legal challenges and probes over how he obtained the rights to the deposit in Guinea. The Guinean government withdrew charges of corruption against him after a seven-year dispute. He denies any wrongdoing.Last year the London Court of International Arbitration found that Steinmetz’s BSG Resources Ltd. made fraudulent representations to Vale when it sold the mine stake. Steinmetz’s appeal was thrown out.The court ordered BSGR to pay the Brazilian company $2 billion for its losses in the joint venture. To collect the cash it is owed under that order, Vale has sought to freeze Steinmetz’s assets and is asking a U.S. judge to help it secure evidence about investments he and others allegedly made in New York real estate.‘Nose Closed’In a conversation with Black Cube’s undercover operatives -- according to a transcript filed with the court documents -- former Vale executive Jose Carlos Martins said he’d had suspicions about the deal. While he recommended Vale go ahead with the purchase, “I’m proposing it with my nose closed because I smell something wrong,” he said, according to the transcript.Martins, who spent almost a decade running the company’s iron ore business, didn’t respond to requests for comment.In the transcript, Martins compared the deal to a beautiful woman with a sexually-transmitted disease.“You bring her to your hotel room, she’s naked, marvelous, and then she says: ‘A little problem, maybe I am with AIDS’, okay? It’s a problem.”Black Cube, which says on its website it hires veterans of the Israeli intelligence community, had a team of more than 20 agents working on the investigation, according to people familiar with the situation. It specializes in targeting human sources for information, often in cases where little or no documentary evidence can be found.The company mapped out all those it believed could have information on the case and built psychological models of its targets, before deciding on the best cover stories and approaches, the people said. The operative who spoke to Martins presented himself as a partner in an investment consultancy, and all recordings were legal, Black Cube says in the court papers.‘Don’t Tell Me’Martins told the Vale board about entering the deal “closing our eyes,” he said to the operative, according to the transcript. “One of the board members said, ‘Don’t tell me, I don’t want to know at all.’”At the beginning of the last decade, Simandou was seen as one of the most strategically important assets in the mining world. Its development was a threat to the three dominant iron ore miners, Vale, BHP Group and Rio Tinto Group, at a time of insatiable Chinese demand for the steelmaking ingredient. It was in that context that Vale wanted the asset.“Everybody knows that there was something wrong,” Martins told the undercover agent, according to the filing. “Myself, the CEO. But it was so important not to let this buying to get the competition hands.”Black Cube also targeted another former Vale executive, Alex Monteiro. According to the transcript, he told operatives: “All the diligence we did was fine, but still, there was that smell of something that could have been done wrongly.” When approached for comment by Bloomberg on Thursday, Monteiro said the due diligence didn’t produce any concerns.“Based on an in-depth due diligence we did, there was no bad smell,” he said by email.Dying PresidentSteinmetz, 64, has a long history in difficult environments across the globe after having been originally sent out by his family to secure supplies of rough diamonds. He developed a diamond mine in Sierra Leone before setting his sights on Simandou in neighboring Guinea.Ailing President Lansana Conte stripped Rio Tinto of its rights to half of the asset, which the Anglo-Australian miner hadn’t developed in a decade of control. The rights lost by Rio were transferred to Steinmetz weeks before the president died in 2008. Then BSGR sold half the asset to Vale.After Alpha Conde was elected in 2010, he announced a review and clean-up of the mining industry, Guinea’s main source of income. Billionaire George Soros and former U.K. Prime Minister Tony Blair advised on and funded Conde’s initiative. A dossier of alleged corruption became the basis for BSGR’s loss of rights. BSGR denied it paid any bribes.In 2014, a Frenchman with ties to Steinmetz and BSG Resources was sentenced to two years in prison for interfering with a U.S. probe of bribery in connection with mining rights in Simandou. Steinmetz is also facing corruption charges in Switzerland over the mining asset, which he denies.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Iconic Brazilian companies Vale SA and Eletrobras SA were removed from the world’s largest sovereign wealth fund due to environmental and human rights concerns.Norges Bank Investment Management said in a statement it’s excluded iron-ore giant Vale from Norway’s $1 trillion pension fund after repeated dam breaches in Brazil killed hundreds of people and caused environmental damage. Eletrobras was withdrawn because of the “unacceptable risk” that the country’s largest utility contributes to serious or systematic human rights violations.Norges’s move deals a blow to Vale, which has taken steps to improve its image after a dam collapse early last year killed 270 people. The Rio de Janeiro-based mining company replaced its top manager, committed to decommissioning riskier dams, and built a treatment plant to clean up polluted water.For Eletrobras, it’s also a reminder of the problems associated with the Belo Monte plant, where construction in the Amazon forest was marked by fierce opposition from environmental groups and a corruption scandal. Norges’s Council on Ethics said the project led to “increased pressure on indigenous lands, the disintegration of indigenous peoples’ social structures and the deterioration of their livelihoods,” with about 20,000 people displaced by the dam. The council also said the company has been involved in other projects that have been criticized for human rights violations.Eletrobras, controlled by the Brazilian government, said in a statement that it has taken “important strategic steps” to strengthen its commitment to human rights practices including closely monitoring subsidiaries like Belo Monte’s operator.Vale declined to comment.Norway’s wealth fund owned $375 million in Vale stock at the end of 2019, according to the latest figures available on the website of Norges Bank Investment Management. It also held $53 million in shares and $21 million in bonds of Eletrobras.Eletrobras fell 1.1% at 3:43 p.m. in Sao Paulo, extending this year’s decline to 46%. Vale rose 3%, reducing 2020’s losses to 9%.Other companies excluded from the fund include Canadian Natural Resources Ltd., Cenovus Energy Inc., Suncor Energy Inc. and Imperial Oil Ltd. due to emissions. ElSewedy Electric Co was also excluded because of its participation in the development of a hydropower project in Tanzania.(Adds Eletrobras comment in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
On April 3, the Vale COVID-19 challenge was launched in Canada to help propel innovative COVID-19 solutions developed by companies, startups, institutions, universities or professionals into the marketplace by offering financial support of up to USD $1M. A total of nearly 1,800 solutions were submitted globally, of which over 300 came from within Canada.
Brazilian state prosecutors filed a lawsuit on Tuesday requesting that miner Anglo American PLC's <AAL.L> licence to expand a mining dam be suspended, following a fatal mining disaster last year. The state of Minas Gerais passed a law last year commonly called "Sea of Mud, Never Again" to change mining rules following the collapse of a dam at a Vale SA <VALE3.SA> facility that released a torrent of mining waste, killing at least 270 people. Based on that law, Minas Gerais prosecutors are seeking to block the planned expansion in capacity of Anglo's Minas-Rio facility, which includes raising the height of a dam that contains mining tailings.
* Brazil confirms first coronavirus case in LatAm * Brazilian stocks eye worst day in more than 33 months * Mexico central bank cuts 2020 growth forecast * Argentine peso hits six-month low (Adds Brazil's movement, market strategist comments, updates prices throughout) By Shreyashi Sanyal Feb 26 (Reuters) - Brazil's real touched a record low on Wednesday as traders returned from the Carnival holiday only to be alarmed by concerns about the spread of the new coronavirus after Sao Paulo confirmed its first case. "Brazil is trying to catch up to all the drops we have seen in the global market and with the new case that came out, put all that together and you expect this type of reaction to show up," said Gaurav Mallik, chief portfolio strategist at State Street Global Advisors in Boston.
While the prices of most major commodities are wilting in the face of the coronavirus spreading out of China, iron ore is rallying, proving that supply disruptions can overcome the bearish sentiment over the economic fallout of the epidemic. Spot iron ore has rallied 14% since hitting a low of $79.85 a tonne on Feb. 3, closing at $90.85 on Monday, according to commodity price reporting agency Argus. Chinese iron ore futures on the Dalian Commodity Exchange enjoyed their longest winning streak in four years, rising 16.6% from a closing low of 580 yuan ($82.50) a tonne on Feb. 10 to end at 676 yuan on Monday.
Brazil's real came off all-time lows to rise for the first time in five sessions, up 0.2%. Crude exporter Colombia's peso rallied 0.7%, despite falling oil prices, while higher copper prices helped the Chilean peso recover from a 1.4% slide in the previous session.
* Virus may peak this month in China -expert * Colombian peso climbs from two-month low * Vale provides biggest boost to Bovespa (Updates prices, adds comment) By Sruthi Shankar Feb 11 (Reuters) - Brazilian shares rallied on Tuesday on upbeat results from miner Vale SA and lender Itaú Unibanco Holding SA, and as global stock markets surged after China's senior medical adviser suggested the coronavirus outbreak may be over in April. The Bovespa gained 2.3%, on course for its best day in over a month and leading gains among major Latin American stock markets. Vale gained 3.5% after it left its 2020 iron ore production guidance unchanged despite posting a sharp output decline in the fourth quarter and as China iron ore futures registered their biggest one-day gain in seven months.
Brazil's Vale SA <VALE3.SA> on Tuesday posted a sharp output decline and $671 million (518.23 million pounds) in net additional provisions stemming from a deadly dam burst about a year ago, underlining the enduring effects of the incident on the iron ore giant. In a statement, the company reported a 22.4% fall in fourth-quarter iron ore production from the same period last year and a 9.6% drop in quarterly terms. With that, Vale officially lost its position in 2019 as the world's top iron ore producer to Rio Tinto <RIO.L>.
The filing of murder charges against the former CEO of Brazilian miner Vale SA and 15 others for a 2019 dam collapse that killed more than 250 people was hailed by victims' families as a major step in bringing those responsible to justice. Federal investigators are yet to identify the cause of the Jan. 25, 2019 collapse of a tailings dam at the Corrego do Feijao iron ore mine dam east of Brumadinho, which released a sea of mud that slammed into Vale's offices and cut through a nearby community, killing 259 people and leaving 11 still missing. "I don't think there are the concrete elements required for homicide charges, precisely because this technical part is missing," Tangerino added.
* Equity markets spooked by spread of China virus * Brazil to discuss cooperation with OPEC - energy minister * Colombian peso slips, mirroring lower oil prices By Shreyashi Sanyal Jan 23 (Reuters) - Stocks across Latin America fell on Thursday as fears mounted over the spread of a new flu-like virus in China, while Brazil's real strengthened as the country looks at the possibility of cooperating with OPEC. China locked down two cities at the epicenter of a coronavirus outbreak that has killed 17 people and infected more than 630.
BHP Group (BHP) reported year-over-year increase in copper and iron ore production during the first half of fiscal 2020 and maintains guidance for fiscal 2020.
Almost a year to the day after a Brazil dam disaster killed more than 250 people, homicide charges have been filed against Fabio Schvartsman, the former CEO of mining giant, Vale SA, which co-owned the mine. The details came from a charging document seen by Reuters, Tuesday. Fifteen others have also been charged with homicide and environmental crimes for their role in the disaster. All of them worked for either Vale or TUV SUD, the German company responsible for inspecting the dam. A state prosecutor had previously told Reuters that employees knew the dam was at risk of collapsing, yet failed to act before disaster struck. In a statement, TUV SUD said it continues to be saddened by the tragedy… and vowed to continue to cooperate with authorities in Brazil and Germany regarding ongoing investigations. Vale said it was premature to assign blame. The charges come a year after the dam collapse released a river of slurry - the muddy byproduct of iron ore processing - and buried people underneath it. It was one of the world’s deadliest mining accidents... that knocked $19 billion off Vale's market value in a single day. Schvartsman was removed as CEO in early March at the urging of prosecutors who alleged his presence at the company posed a danger to society.
Brazilian state prosecutors on Tuesday charged Fabio Schvartsman, the former chief executive of mining giant Vale SA <VALE3.SA>, and 15 other people with homicide for a dam disaster last year that killed more than 250 people, according to the charging document seen by Reuters. In addition to homicide charges, Vale and TUV SUD, the German company responsible for inspecting the dam, were charged with environmental crimes. Of the 16 individuals charged, 11 had worked for Vale and five for TUV SUD, prosecutors said.
A Brazilian state prosecutor expects to bring criminal charges "in the next few days" against miner Vale <VALE3.SA> over a mining waste dam collapse that killed at least 259 people, even as the prosecutor's federal counterpart continues to investigate the case. Andressa de Oliveira Lanchotti, coordinator for the task force of state prosecutors investigating the disaster, told Reuters they expect to indict 15 to 20 people, including executives from Vale and employees from German inspection firm TÜV SÜD - as well as the companies themselves. "What we can take away from the investigations is there were several factors pointing to risk - the risk was not unknown," Lanchotti said, disputing Vale's contention that it had no way of knowing that the dam that unleashed an avalanche of mining waste on the Brazilian town of Brumadinho in January 2019 posed a danger.