BHP, Rio Breakdown a Boon for Vale

A breakdown in merger talks between global mining concerns BHP Billiton and Rio Tinto Tuesday is marginally positive news for Brazilian iron ore specialist Vale, say analysts. “The threat to Vale’s title as the world’s biggest iron ore miner is gone for now,” says an analyst at Banif-Ixe who declined to be named. He adds that Vale also maintains leverage in determining price increases. A BHP-Rio union is seen as having added impetus to a nascent push within the mining and steel industries for price indexation that would have reduced Vale’s ability to dictate terms. Vale ADRs rose 1.87% Tuesday, in line with the Bovespa’s 1.83% rise.