Vale Says No Xstrata Talks

Brazil’s Vale is not in talks to acquire Swiss-based mining powerhouse Xstrata, Fabio Barbosa, CFO of the Brazilian metals giant, tells LatinFinance. In last year’s pursuit of Xstrata for close to $90bn, Vale raised the hopes of lenders on the transaction, who collectively stood to reap over $100m in fees. But talks fell apart a year ago and have since appeared to remain dormant, despite Xstrata’s deteriorating market cap, which is down some 88% since a May 16 peak when shares hit £4,313. Unlike Xstrata, Vale has over the past 12 months maintained its relative position by market cap within the mining world at number 2 after BHP Billiton, and in June it raised over $12bn in an equity follow-on. The Brazilian company is known to have looked at Mexican fertilizer specialist Fertinal, and last week concluded its acquisition of coal assets in Colombia from Cementos Argos for $306m. The latter transaction is part of a strategic push by Vale into the coal business, it says. “Vale is seeking to build a coal asset platform in the [Colombia] to enhance our growth options in the coal business,” which already includes assets in Australia, China and Mozambique, says the company.