Acquisitions made by Vale after crisis aim at strategic assets
Valor Econômico 02/02/2009
The acquisitions of the assets of Rio Tinto, closed in the early hours of Friday, shows the new way adopted by Vale do Rio Doce to go shopping amidst the global economic crisis. The acquisition strategy of the company for hard times, that have affected the mining sector, gives priority to the purchase of assets of small- and mid-sized companies with synergy with the current businesses, instead of searching for large and expensive mining companies, like Swiss Xstrata. In order to do so the Brazilian mining company had no doubt on paying US$ 750 million for the iron ore system of Corumbá (MS) owned by the British-Australian company, including the logistics, and another US$ 850 million for potassium reserves in Argentina and Canada. With US$ 15 billion in cash to spend, Vale spent US$ 1.9 billion into four assets, after the start of the world crisis, including the business with Rio Tinto. At the end of November, it acquired PGT, a company specialized in the identification of oil areas, by US$ 10 million. In the middle of December, it paid US$ 65 million for 50% of the interest in a copper company to be created by South-African African Rainbow Minerals Limited (ARM), which has business in the famous "African copper belt", a metal that is one of the focuses of Vale. Before Christmas, the company entered into a contract to have 100% of the export assets of coal of Cementos Argos, in Colombia, by US$ 300 million. 10 days ago, it announced the negotiations with Woodside Energia Investimentos em Exploração de Petróleo in order to have half of the shareholding of the company in consortiums in the Santos Basin, aiming at exploring gas for its own consumption. The Rio Tinto mine, a world class asset, is an open pit located in Mato Grosso do Sul. The logistics assets include large barges and the river port of San Nicolas, in Argentina. The mine has proven and probable reserves of 210 million tons and mineral resources of 583 million tons, with a 62.5% content. The logistics assets allow it to be 70% self-sufficient in the transportation of the product through the Paraguay River. Recently, Vale ordered 32 barges to national shipyards, in an investment of US$ 122.3 million, which will certainly be used in its new company. The purchase of potassium assets shows another focus of Vale, besides ore, copper and coal, which is the fertilizer business, a promising business, in line with the company's growth strategy.