Vale Is Looking to Raise $1.5 Billion With the Sale of Some Assets

  • Company looking to sell shipping, fertilizer and energy assets
  • No iron-ore deals are being discussed after prices rebounded

Vale SA is downsizing its divestment plans this year as commodity prices recover, focusing on unloading less-important operations while jettisoning proposals to sell any of its prized iron-ore assets, said people with knowledge of the plans.

The Rio de Janeiro-based company is looking to raise about $1.5 billion with the sale of shipping, fertilizer and energy assets, the people said, asking not to be identified because talks are private. With iron-ore prices up more than 80 percent in the past year, Vale has ceased efforts to sell future production in so-called streaming deals, they said. The company’s press department confirmed that there are no talks under way to sell iron assets.

The Brazilian company joins Anglo American Plc and Glencore Plc in scrapping some proposed asset sales as cost cuts and recovering commodity prices generate enough cash to meet debt-reduction targets.

After iron-ore prices slumped to $38 a metric ton at the end of 2015 amid a global glut, Vale opened the door to selling some of its best assets to ease one of the mining industry’s biggest debt loads. In August, Vale was said to be in talks with a group of Chinese investors for a multibillion-dollar iron-ore streaming deal. Then demand picked up in China and prices of the steel-making ingredient are now back above $90, sending Vale’s earnings back to 2014 levels.

Still, the company is moving forward with the sale of assets it considers outside its core interests.

It’s trying to sell a nitrogen operation in the city of Cubatao, four iron-ore carriers and energy assets including a stake in the Belo Monte hydroelectric dam in the Amazon, the people said.

Vale confirmed on Friday that it’s looking to divest the Cubatao assets, which were left out of Vale’s $2.5 billion sale of fertilizer operations to Mosaic Co. announced in December. The company declined to comment on energy assets, vessels or the amount it’s seeking to raise.

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