Vale (mining company)
|Industry||Metals and Mining|
|Headquarters||Rio de Janeiro, RJ, Brazil|
|Murilo Ferreira, Chief Executive Officer
Fabio Barbosa, Chief Financial Officer
Iron ore pellets
|Revenue||US$26.047 billion (2015)|
|-US$6.131 billion (2015)|
|-US$17.720 billion (2015)|
|Total assets||US$88.492 billion (2015)|
|Total equity||US$35.704 billion (2015)|
Number of employees
Vale is the largest producer of iron ore and nickel in the world. Vale also produces manganese, ferroalloys, copper, bauxite, potash, kaolin, and cobalt. The company also currently operates nine hydroelectricity plants and a large network of railroads, ships, and ports used to transport its products.
- 1 Current operations
- 2 History
- 3 Controversies
- 4 References
- 5 Bibliography
- 6 External links
Iron ore: Vale is the world's largest iron ore producer. Sales of iron ore fines and pellets represented 65% of total company revenues in 2014. In 2014, Vale sold 256 million metric tonnes of iron ore fines and 44 million metric tonnes of iron ore pellets. Vale's Mariana Hub was the 9th largest iron ore mining center in the world in 2014, with an output of 39 million metric tonnes. Vale's Serra Sull / S11D is the largest mining reserve in the world. The company's iron ore mines are primarily in Brazil.
Nickel: Vale is the world's largest nickel producer. Sales of nickel represented 17% of total company revenues in 2014. In 2014, Vale sold 272,000 metric tonnes of nickel. The company owns nickel mines in Canada, Indonesia, New Caledonia, and Brazil.
Fertilizer products, primarily phosphates and nitrogen: Sales of fertilizer products represented 6% of total company revenues in 2014. In 2014, Vale sold 9 million metric tonnes of fertilizer products.
Copper: Sales of copper concentrate represented 4% of total company revenues in 2014. In 2014, Vale sold 353,000 metric tonnes of copper. The company owns copper mines in Brazil, Canada, Chile, and Zambia.
From 2000 to 2006 Vale invested more than $1.3 billion on the acquisition of over 361 locomotives and around 14,090 freight cars, those locomotives were primarily for iron ore transportation, but some were for regular cargo. Some of the locomotives purchased were secondhand for refurbishment but at least 55 of the locomotives acquired were new ones of the model EMD SD70M, each one costing about $2 million.
- Vitória a Minas railroad - Vale operates under a 30-year contract this 905 km, 1,000 mm (3 ft 3 3⁄8 in) railroad, which is used to transport iron from the Iron Quadrangle in Minas Gerais to the Port of Tubarão in the state of Espírito Santo . The concession expires in 2027. This railroad also carried 1.1 million passengers in 2006.
- Carajás railroad - The concession of this 892 km, 1,600 mm (5 ft 3 in) gauge railroad also expires in 2027, it links Carajás iron ore mines in the state of Pará to Ponta da Madeira port terminal in the state of Maranhão. Vale operates a train of 3.2 km and 340 cars on this railroad.
- Ferrovia Centro-Atlântica - Vale controls this railroad through the subsidiary FCA. As it is shown on the Vale's operations map above, this 7,000 km, 1,000 mm (3 ft 3 3⁄8 in) railroad extends through 6 brazilian states, this railroad originally belonged to the RFFSA. Vale's concession of this railroad expires in 2026.
- Vale also has a stake in railway operators in Mozambique and Malawi.
Ports and container terminals
- Port of Tubarão - Vale owns and operates this port located in Vitória, Brazil in the state of Espirito Santo. It's the largest iron ore embarking port in the world. Around 80 million metric tons of iron ore (30% of the company's annual production) are shipped through this port.
- Ponta da Madeira - Located in the state of Maranhão, it ships around 70 million metric tons mostly of iron ore, but also of manganese and copper for the company; it is being upgraded for the S11D project
- Port of Sepetiba - Vale operates two maritime terminals in the Port of Sepetiba area located in the state of Rio de Janeiro, together they ship around 60 million metric tons of iron ore.
- Teluk Rubiah Maritime Terminal (TRMT) - A state of the art maritime terminal in the state of Perak, operates distribution centre for iron ore caters for Asia Pacific.
Vale has also entered the shipping business by ordering 35 Very Large Ore Carriers (VLOC) to transport iron ore between South America and Asia. These 362-metre (1,188 ft), 400,000 DWT ships are the longest and largest dry bulk carriers in the world. The first ship, Vale Brasil, was delivered in March 2011.
Vale's energy business is focused at power production to fulfill the needs of its mining operations, as well as supplying the general Brazilian power grid. In 2005 it consumed 16.9 TWh of electrical power, accounting for 4.4% of Brazil's total consumption in that year.
Vale has participation in 8 hydroelectric plants, with 7 of these located in the state of Minas Gerais. Vale's investment in hydroelectric power plants totals $880 million. The company also plans to build a 600 MW thermoeletric power plant in the state of Pará.
|Name||Location||Production Capacity||Vale's Ownership||Vale's Investment||Start of Operations|
|Aimorés||Minas Gerais||330 MW||51%||$141 million||July 2005|
|Candonga||Minas Gerais||140 MW||50%||$46 million||September 2004|
|Capim Branco I||Minas Gerais||240 MW||48.42%||$90 million||February 2006|
|Capim Branco II||Minas Gerais||210 MW||48.42%||$90 million||May 2007|
|Estreito||Tocantins||1,087 MW||30%||$355 million||August 2009|
|Funil||Minas Gerais||180 MW||51%||$49 million||December 2002|
|Igarapava||Minas Gerais||210 MW||38.15%||$88.1 million||January 1999|
|Porto Estrela||Minas Gerais||112 MW||33.33%%||$20 million||September 2001|
In November 2007, the company retired the name CVRD in favour of simplified company name of Vale, and rebranded.
Founded as Companhia Vale do Rio Doce (widely known as CVRD prior to 2007) (in English, "Doce River Valley Company") was founded in Itabira, Minas Gerais, by the Brazilian Federal Government on June 1, 1942.
One year later the Vitória a Minas railroad was inaugurated.
The 1950s marked Companhia Vale do Rio Doce’s entry into the global iron ore market, after the company's mine-railroad-port complex was modernized and iron ore prices doubled. At first, sales were mostly to the United States, but exports to Europe increased over the course of the decade.
In 1966, the company inaugurated in Espirito Santo the Port of Tubarão, which was to become the most important port for CVRD and is still used to export iron ore mined from the Iron Quadrangle in Minas Gerais.
In 1974, Vale became the world's biggest exporter of iron ore, a title which it still holds today.
Privatization in 1997
In May 1997, despite protests by Vale employees and some politicians, the Brazilian Government auctioned a 41.73% interest in the company, which was sold for R$3.34 billion (US$3.13 billion). The largest interest purchased was a 16.3% stake purchased by Brazilian steel company Companhia Siderúrgica Nacional.
Sale of wood pulp businesses
In 2001, Vale sold its Cenibra wood pulp business for US$670.5 million to focus on mining and logistics.
In 2002, Vale sold 100,000 acres of land and the eucalyptus forests thereon related to its wood pulp business for R$137 million.
Sale of steel businesses
Acquisitions of Brazilian iron ore companies
In May 2000, the company also acquired a controlling interest in Samitri, one of the biggest pelletizing companies of Brazil.
In April 2001, the company acquired Ferteco, then the third largest Brazilian producer of iron ore, with a production capacity of 15 million tonnes per year.
In 2006, the company acquired Rio Verde Mineracao for $47 million.
On April 1, 2000, Vale offered to pay Mitsui US$277 million for 50% of the common shares and US$150 million for 40% of the preferred stock in Caemi. Caemi owned MBR, Brazil's second largest iron ore producer, mining over 60 million tonnes per year.
The acquisition was approved by European regulators subject to conditions.
In September 2003, Vale purchased an additional stake in Caemi from Mitsui for US$426.4 million.
Also in 2007, Vale announced that it will lease the shares of MBR that it did not already own from their 7 Japanese shareholders for a 30-year period. The agreement required the company to pay a total of US$60.5 million in 2007 and US$48.1 million annually for a 30-year period and gave it total control of MBR.
In 2015, Vale announced the sale of a 36.4% interest in MBR for R$4 billion.
Diversification into non-ferrous metals, coal and phosphate
In 2001, Vale increased its copper mining operations by purchasing the Sossego mine in Carajas, in northern Brazil, for $48.5 million.
In October 2006, Vale acquired Canadian-based nickel producer Inco, for $18.9 billion, including $17.7 billion in cash and the assumption of $1.2 billion in debt. To gain approval from Canadian authorities, Vale promised to continue investments in Canada and not layoff people for 3 years after closing.
In 2007, Vale made a major entry into coal mining by acquiring AMCI Holdings Australia for AU$835 million.
In 2011, the company sold its aluminum business to Norsk Hydro in a US$5.27 billion transaction.
In 2014, Vale sold its interest in Fosbrasil S.A., a manufacturer of phosphate-based products.
On November 5, 2015, a dam collapsed at the Samarco mining site, co-owned by Vale and BHP Billiton. The accident resulted in 17 deaths and massive environmental contamination. Activities at the mine were suspended, and the companies agreed to pay compensation of R$4.4 billion (US$1.55 billion).
On November 26, 2015, Vale announced that it planned to reduce its budget for capital expenditures from US$8 billion in 2015 to US$6.2 billion in 2016, with further reductions to US$4–5 billion by 2018.
Vale was elected as the corporation with the most "contempt for the environment and human rights" in the world during a January 2012 vote organized by the Public Eye. The choice was made by public vote and Vale received 25,000 votes.
- Vale's Performance in 2015
- Vale: Leadership
- Vale 2014 Form 20-F Annual Report
- Vale 2014 Form 20-F Annual Report
- Vale: Across the World
- Cecilia Jamasmie (February 25, 2016). "Vale posts record loss, to sell core assets". Mining.com.
- Vladimir Basov (September 17, 2015). "True giants of mining: World's top 10 iron ore mines". Mining.com.
- "CVRD-controlled Carajas Railway received 12 new SD70M locomotives from Electro-Motive Diesel in December to handle growing traffic". International Railway Journal. 2006.[dead link]
- EMD: JT2CWR
- Ferrovia Centro Atlântica
- "Railway Gazette: Mining drives African rail plans". Retrieved 2010-11-02.
- Porto e Negócios
- News Article Archived 17 November 2007 at the Wayback Machine.
- Brazilian mining group’s giant ore carrier soon to enter service. Mining Weekly, 13th May 2011. Retrieved 2011-08-26.
- SEC Info - Companhia Vale do Rio Doce, et al. - 20-F - For 12/31/05
- A CVRD Anuncia a Construção de uma Térmica a Carvão - Adriano Pires: O Globo Online
- "As CVRD changes name to Vale, iron ore pre-talks begin". Mineweb. November 30, 2007.
- Vale History Book: Chapter 1
- Vale History Book: Chapter 3
- Vale History Book 5
- Alan Riding (May 19, 1985). "Mining for Profits in the Jungles of Brazil". New York Times.
- "First ship loaded at Ponta da Madeira: a special Monday in Vale's history" (Press release). January 15, 2016.
- "Brazil Awards Big Mining Stake To Group Bidding $3.13 Billion". New York Times. May 7, 1997.
- "CVRD Concludes the Sale of CENIBRA" (Press release). PRNewswire. September 14, 2001.
- "CVRD Sells its Last Pulp and Paper Assets" (Press release). PRNewswire. June 10, 2002.
- "CVRD Divests AÇOMINAS" (Press release). December 7, 2000.
- "Cross Shareholding Unwinding: CVRD Sells Its CSN Stake" (Press release). PRNewswire. March 15, 2001.
- "CVRD Divests Its Stake in CST" (Press release). PRNewswire. June 28, 2004.
- "Ternium Purchases CVRD's Ownership Stake in Siderar" (Press release). Business Wire. December 28, 2006.
- "CVRD Restructures Its Investment in Usiminas" (Press release). PRNewswire. November 6, 2006.
- "Brazilian mining giant Vale do Rio Doce share offer seen yielding R$1.93 billion". April 17, 2007.
- "Vale sells its stake in Usiminas". Steel Orbis. April 17, 2009.
- "CVRD Acquired SOCOIMEX" (Press release). May 15, 2000.
- "Acquisition of SAMITRI" (Press release). May 30, 2000.
- "CVRD Negotiates the Acquisition of FERTECO" (Press release). April 12, 2001.
- "CVRD to Invest US$ 6.3 Billion in 2007" (Press release). PRNewswire. January 26, 2007.
- Matthew Flynn (April 15, 2003). "CVRD's Caemi purchase might face conditions". BN Americas.
- "Commission clears merger between Brazilian iron ore producers subject to undertakings". European Commission. October 30, 2001.
- "CVRD in $426m iron-ore acquisition". Mining Weekly. September 5, 2003.
- "CVRD Announces Stock Merger With Caemi" (Press release). PRNewswire. January 23, 2006.
- "Mitsui to Sell Shares in EBM to CVRD". Mitsui. May 2, 2007.
- "CVRD seeking synergies with MBR". BN Americas. May 2, 2007.
- "Vale announces the sale of a minority stake of MBR" (Press release). June 30, 2015.
- "Acquisition of the Sossego Project Confirms CVRD Copper Strategy" (Press release). PRNewswire. October 25, 2001.
- "CVRD Successfully Completes Take-Over Bid for Canico" (Press release). PRNewswire. December 9, 2005.
- "Canico accepts sweetened CVRD offer". Globe and Mail. November 12, 2005.
- "CVRD Announces Proposed All-Cash Offer to Acquire Inco" (Press release). PRNewswire. August 11, 2006.
- "CVRD obtains Investment Canada Act approval" (Press release). Vale. October 18, 2006.
- "CVRD concludes acquisition of AMCI Holdings Australia" (Press release). April 20, 2007.
- "Vale launches public offer to acquire Paranapanema" (Press release). July 29, 2010.
- Fernanda de Biagio (July 29, 2010). "Vale offers to buy Paranapanema for US$1.14bn". BN Americas.
- Fernanda de Biagio (September 30, 2010). "VVale concludes acquisition of Mosaic stake in Fosfertil for US$1.03bn". BN Americas.
- "Vale acquires Fosfertil shares" (Press release). January 28, 2010.
- "Vale mine death plea disappoints union". CBC. September 19, 2013.
- "Hydro-Vale aluminium transaction to be completed today" (Press release). Norsk Hydro. February 28, 2011.
- Vale sells ferromanganese units to Glencore for $160 mln, Reuters, July 11, 2012
- "Vale of Brazil Sells Coal Stake to Mitsui & Co. for About $950 Million". New York Times. December 9, 2014.
- "ICL Completes Acquisition Of 100% Of Fosbrasil S.A" (Press release). PRNewswire. December 22, 2014.
- "Silver Wheaton Acquires Additional Gold Stream From Vale's Salobo Mine" (Press release). PRNewswire. March 2, 2015.
- "Norsk Hydro: Hydro enters LoI with Vale to raise MRN ownership to 45%" (Press release). Globe Newswire. October 9, 2015.
- "BHP Billiton reaches $1.55bn settlement with Brazil over dam collapse". The Guardian. 2 March 2016. Retrieved 20 March 2016.
- Vale presents strategic planning for 2016 in London
- Chaudhuri, Saabira (January 27, 2012). "Public Eye award singles out Brazilian mining company, Barclays". The Guardian.
- (French) Michel Braudeau, « Mourir dans l'or à Serra Pelada », in Le rêve amazonien, éditions Gallimard, 2004 (ISBN 2-07-077049-4).
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