Vale Chief Prioritizes Buyback, Capex

Vale CEO Roger Agnelli insists his company plans to deploy the bulk of its $15.3bn cash position internally, rather than on acquisitions. “[There’s] nothing better [to do] right now than to buy back our own shares. We feel current [share] prices are implying a disaster for next year. We don’t see this disaster,” Agnelli says during Vale’s visit to the New York Stock exchange. He notes the company’s $11.5bn follow-on in July was executed at twice today’s levels. The costs of organic investment have dropped along with asset prices, and Vale is committed to finishing all of the projects in its pipeline, he claims. According to its investment plan, the miner is looking at spending $14.2bn on more than 30 projects on five continents. Agnelli did not discount the possibility of studying an acquisition if the right opportunity was there. Also, Angelli says the move to cancel a 12% price increase for Asian customers, was due to a drop in demand. “The problem today is not price, the problem for everyone is demand,” he says.