RIO DE JANEIRO, BRAZIL – With Vale’s stock down 32% from its late July high in dollars, the mining company is now behind Mercado Libre, the e-commerce giant currently valued at US$90 billion after the strong performance of its fintech business in the last quarter.
The shift in the ranking – with a new economy platform taking over the top spot from a 79-year-old raw materials producer – may take hold amid China’s efforts to clean up its industrial sector, which have driven iron ore below US$100 a ton.
The slump in iron ore prices has shrunk Vale’s market value by some US$40 billion.
Last week, UBS announced a double downgrade of its recommendation for Vale ADRs from buy to sell, while Bradesco BBI sees risks in a volatile environment for down-trending commodity prices. Should iron ore trade at an average of US$90 next year, Vale’s EBITDA could fall below the consensual estimate for 2022 by 38%.
The impact on Vale could have been even worse had the mining company not announced US$13.8 billion in shareholder dividends so far this year.
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What Vale does. Vale S.A., together with its subsidiaries, produces iron ore and nickel in Brazil, Asia, the Middle East, North Africa, Europe, the Americas, and Oceania. The company operates in two segments, Iron Ore Solutions and Vale Base Metals. It extracts, produces, and distributes iron ore, iron ore pellets, briquettes, nickel, copper, other ferrous…
