Brazil’s mining giant Vale S.A. is most valuable company in Latin America

RIO DE JANEIRO, BRAZIL – Vale S.A., Brazil’s giant mining company, surpassed the US$100 billion mark in market value, expanding its position as the most valuable company in Latin America.

According to a survey by Economática, the company closed the trading session on Tuesday, April 27th, of B3, the São Paulo Stock Exchange, worth US$103.8 billion, over US$20 billion ahead of Argentine e-commerce giant Mercado Libre, ranked second.

According to Economática, since surpassing the Argentine company, the Brazilian mining company keeps gaining a lead over its competitors in the region – on Monday, the company’s shares closed the trading session at R$110 after rising almost 1.5% on Tuesday’s trading session, in reaction to the financial results posted the day before.

The region’s “top three” are completed by Mercado Libre, which is worth US$80 billion, and the Mexican arm of the American retailer Wal-Mart, valued at US$56 billion.

Among the region’s “top 10”, Brazil leads with 5 companies. Completing the national participation in this ranking are Petrobras (US$56.9 billion), Itaú Unibanco (US$45.9 billion), Ambev (US$44.2 billion) and Bradesco (US$39.1 billion), all traditional market companies.

Emerging companies in recent years, which have appreciated strongly on B3, rank just below the top ten and include the Santa Catarina-based Weg (13th place, with US$28.7 billion) and the retailer Magazine Luiza (15th place, with US$25.7 billion).

Following Brazil, Mexico ranks second with more companies in the list of the most valuable in Latin America (with 2 companies), followed by Argentina and Bermuda, with 1 each.

Image in recovery

The company’s recovery came after a blow suffered two years ago, with the tragedy of Brumadinho, in Minas Gerais, which caused tremendous environmental impacts and resulted in the deaths of 270 people, most of whom were company workers.

The company closed billion-dollar reparations agreements after the incident and also faced an image and safety crisis related to its tailings dams.

Last year, however, fueled by higher iron ore prices and better sales volumes, the company managed to reverse the US$1.683 billion loss in 2019, and posted a net profit of US$4.881 billion. It was a year in which the company, in the words of its CEO Eduardo Bartolomeo, became a more reliable operator and proved better prepared to face 2021.

This year, with the Brumadinho agreement closed, the company has been able to expand its earnings. The conciliation agreement, of R$37.68 billion, was well above the initial proposal made by the mining company, of R$29 billion, and closer to the R$40 billion demanded by the State and authorities such as the Prosecutor’s Office and the Ombudsman’s Office.

The term did not remove any responsibility from the company. In addition, the document imposed new obligations and served as an acknowledgement of the mining company’s responsibility for what happened. Individual proceedings for damages and criminal lawsuits are still being processed, but the financial market sees the issue as settled.

This past Monday, April 26, the company reported a net income of US$5.546 billion in the first quarter 2021, up 2,220% from the US$239 million earned in the same period last year.

The result was also up significantly from the previous quarter, when the company posted earnings of US$739 million. The results came in line with the already high expectations of market analysts.

One of the world’s largest iron ore producers, the company had adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of US$8.35 billion between January and March, up from US$2.882 billion a year earlier.

Companies with the highest market value in Latin America

Vale (Brazil) – US$103.8 billion

Mercado Livre (Argentina) – US$80 billion

Wal-Mart Mexico (Mexico) – US$56.9 billion

Petrobras (Brazil) – US$54.9 billion

America Movil (Mexico) – US$48.6 billion

Itaú Unibanco (Brazil) – US$46 billion

Ambev (Brazil) – US$44.2 billion

Grupo Mexico (Mexico) – US$39.2 billion

Bradesco (Brazil) – US$39.1 billion

Marvell Technology (Bermuda) – US$31 billion

Source: Economática