Why invest in Vale?

Why invest in Vale?

Invest in Vale

Vale is one of the most traded mining companies on the worldwide stock exchanges. With a market capitalization of approximately $ 60 billion, we have about 220,000 shareholders on every continent.

Business strategy

We are focusing on increasing our competitiveness. Look at our strategic pillars.

Increasing productivity
Increasing volumes
Delivering projects
Strengthening our license to operate
Reducing costs and expenses

Setting the
basis for strong
Free Cash Flows

3Q19 Operational Results

  • Iron ore 86,7 Mt
  • Pellets 11,1 Mt
  • Coal 2,3 Mt
  • Manganese Ore 443 kt
  • Copper 98,3 kt
  • Nickel 51,4 kt

Premium for ore quality

Vale has the highest-concentration iron ore in the world with the lowest levels of impurities. As a result, our clients have lower furnace processing costs. This makes all the difference when market demand is high, and our price carries a premium for the quality of our product.

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Looking to the future

Largest mining complex in Vale's history, the S11D Eliezer Batista Complex is an enterprise that integrates productivity with respect for people, and technology with environmental intelligence. In addition to increasing production in the state of Pará to 230 million metric tons per year, the project brings innovative solutions such as the truckless system, which replaces traditional off-highway trucks for conveyor belts and will reduce diesel consumption by about 70 percent. The dry processing (using iron ore's own natural moisture )will cut water consumption by 93% and it eliminates the need of tailings dams. Investments in innovation, combined with Vale's experience, enables a more efficient operation with less impact on the environment.

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More reasons for you to invest in Vale

  • We are one of the largest private companies in the Americas
  • We operate in around 30 countries
  • We employ about 120 thousand people
  • We invest in sustainability
  • We are considered a benchmark in corporate governance practices

Risk factors

Before investing in Vale, understand some of the risks related to our business.

1. Our business is exposed to the cyclicality of global economic activity and requires significant investments of capital.

As a mining company, we are a supplier of industrial raw materials. Industrial production tends to be the most cyclical and volatile component of global economic activity, which affects demand for minerals and metals. At the same time, investment in mining requires a substantial amount of funds in order to replenish reserves, expand and maintain production capacity, build infrastructure, preserve the environment, prevent fatalities and occupational hazards and minimize social impacts. Sensitivity to industrial production, together with the need for significant long-term capital investments, are important sources of risk for our financial performance and growth prospects.

2. The prices for our products are subject to volatility, which may adversely affect our business.

Global prices for metals are subject to significant fluctuations and are affected by many factors, including actual and expected global macroeconomic and political conditions, regional and sectorial factors, levels of supply and demand, the availability and cost of substitutes, inventory levels, technological developments, regulatory and international trade matters, investments by commodity funds and others and actions of participants in the commodity markets. Sustained low market prices for the products we sell may result in the suspension of certain of our projects and operations, decrease in our mineral reserves, impairment of assets, and may adversely affect our cash flows, financial position and results of operations.

3. Adverse economic developments in China could have a negative impact on our revenues, cash flow and profitability.

China has been the main driver of global demand for minerals and metals over the last few years. In 2018, Chinese demand represented 72% of global demand for seaborne iron ore, 51% of global demand for nickel and 49% of global demand for copper. The percentage of our net operating revenues attributable to sales to customers in China was 41.7% in 2018. Therefore, any contraction of China’s economic growth could result in lower demand for our products, leading to lower revenues, cash flow and profitability. Poor performance in the Chinese real estate sector, the largest consumer of carbon steel in China, would also negatively impact our results.

4. Changes in exchange rates for the currencies in which we conduct operations could adversely affect our financial condition and results of operations.

A substantial portion of our revenues, trade receivables and our debt is denominated in U.S. dollars, and given that our functional currency is the Brazilian real, changes in exchange rates may result in (i) losses or gains on our net U.S. dollar-denominated indebtedness and accounts receivable and (ii) fair value losses or gains on currency derivatives we use to stabilize our cash flow in U.S. dollars. In 2018, we had net foreign exchange losses of US$2.247 million, while we had net foreign exchange losses of US$463 million in 2017 and net foreign exchange gains of US$3.252 billion in 2016. In addition, changing values of the Brazilian real, the Canadian dollar, the Euro, the Indonesian rupiah, the Chinese yuan and other currencies against the U.S. dollar affects our results since most of our costs of goods sold is denominated in currencies other than the U.S. dollar, principally the real (50.9% in 2018) and the Canadian dollar (5.4% in 2018), while our revenues are mostly U.S. dollar-denominated. We expect currency fluctuations to continue to affect our financial income, expense and cash flow generation.

5. Concessions, authorizations, licenses and permits are subject to expiration, limitation on renewal and various other risks and uncertainties.

Our operations depend on authorizations and concessions from governmental regulatory agencies in the countries in which we operate. We are subject to laws and regulations in many jurisdictions that can change at any time, and changes in laws and regulations may require modifications to our technologies and operations and result in unanticipated capital expenditures.

Find out more about risk factors in our annual Form 20-F.


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