Mensajepor Chulete » Vie Jul 10, 2020 1:01 pm
SÃO PAULO -- Brazilian iron-ore mining giant Vale SA is financially ready to resume making divided payments after an almost two-year halt following the deadly dam failure in Brumadinho, but it is waiting to see how the coronavirus pandemic advances before making a decision, Chief Financial Officer Luciano Siani said Friday.
Vale's policy was to pay a dividend twice a year, in March and September, and it last distributed cash to shareholders in September 2018 . After the Brumadinho disaster in January 2019 , which killed 270 people, Vale chose to halt payments and focus on helping survivors, rebuilding the town and cleaning up the environmental effects.
Almost a year and a half after the accident, Vale has made progress in those areas and has the financial capacity to start paying dividends again, Mr. Siani said during a webcast sponsored by XP Investimentos.
"From that point of view, there are no more reasons not to distribute dividends," Mr. Siani said. "But we're still in an unprecedented situation" because of the pandemic, he said, and Vale prefers to be conservative and wait to see how things go before committing to resuming payments.
Demand in China , which currently buys about 75% of the world's iron-ore production, fell while the country was working to control the spread of the coronavirus. Vale is watching for a second wave of infections in the Asian country. The risks of that happening appear to be diminishing, Mr. Siani said.
One reason for Vale's positive financial situation is the recent high prices for iron ore, Mr. Siani said. Lower-than-expected production in the first quarter by Vale and rivals in Australia helped push the price higher, but with output increasing again, the price should decline during the second quarter, according to the CFO.
Even with all the cash Vale has at the moment, the company isn't planning any big acquisitions, he said. Previous purchases by the company didn't go as well as hoped, and Vale prefers to use its money to remunerate clients instead, he said.
Vale also isn't planning to increase debt. The company has had a target for liquid debt of about $10 billion , and has $5 billion in liquid debt at the moment. But Vale also has financial commitments related to the Brumadinho disaster of about $4 billion , so it is comfortable with the current level, Mr. Siani said.
