cvrd will buy aus mining companies
This will be extremely interesting for our AUSSIE mining companies, the mining industry and for our AUS markets...very positive IMHO !!! :)))
Price would be the guide for Vale's expansion By Victoria Batchelor Bloomberg News
Published: June 12, 2006
SYDNEY: Vale do Rio Doce is open to the idea of buying mining companies to expand its operations in Australia, the world's biggest shipper of coal, iron ore and alumina, but only if the price is right.
The Brazilian iron-ore producer, the world's largest, is finding that expansion is becoming increasingly expensive as global demand for commodities surges.
Vale is using record profits to increase production of iron ore, improve its rail and port facilities, and expand into new areas like nickel, copper and coal amid strong demand. Last year, it made capital expenditures of $4.2 billion.
"If the opportunities appear, why not," José Carlos Martins, an executive director of Vale, said in a television interview Sunday with Australian Broadcasting. "Nowadays to buy assets is very expensive. But if the opportunity appears, we will consider."
In January, the company, which is based in Rio de Janeiro, bought the shares it did not already own of Caemi Mineração e Metalurgia in a stock trade valued at about $1.46 billion. And last year it bought Canico Resource, the nickel miner, for 876 million Canadian dollars, or $792 million. The purchases were part of the plan by Roger Agnelli, the company's chief executive, to make Vale one of the world's largest diversified miners.
"Australia is very rich in resources so there is certainly a lot of potential for Vale to expand by either acquisition" or developing projects, said Eric Betts, an equities strategist at Nomura Australia in Sydney. "A big company like that could definitely do something. One hurdle is prices have gotten quite high here."
The S&P/Australian Stock Exchange 200 materials index has risen 44 percent in the past 12 months and is trading at 21 times earnings, compared with an 18 percent gain in the benchmark index, which is trading at 17 times earnings.
Australia has a record 34 billion Australian dollars, or $25.5 billion, of minerals and energy projects being developed as companies increase output to meet soaring demand led by China, the Australian Bureau of Agricultural and Resource Economics said last month.
"We opened our office here last year for coal exploration mainly, but we intend it to grow for other businesses," Martins said. Australia is "a very good environment for business. It's a low risk country" with "a lot of opportunities," he said.
Vale, BHP Billiton and the world's other largest miners are holding $32 billion in cash for possible takeovers as rising iron ore prices allow them to reduce debt and return money to shareholders, the accounting services firm PricewaterhouseCoopers said in a report this month.
Vale's main method of improving output and sales is by building new projects, what it calls greenfield developments, Martins said. "Greenfield takes time but it's solid. You pay a reasonable price for it and you build it brick by brick."
Vale remains locked in talks with Chinese steel makers over this year's price settlement for the benchmark price of iron ore, a key steel making ingredient. Vale and its rivals, Rio Tinto Group and BHP Billiton, have secured agreements from steel makers in Europe and the rest of Asia for a 19 percent increase this year. China, the world's largest steel maker, could set the benchmark price for iron ore as soon as next year, Martins said.
SYDNEY: Vale do Rio Doce is open to the idea of buying mining companies to expand its operations in Australia, the world's biggest shipper of coal, iron ore and alumina, but only if the price is right.
The Brazilian iron-ore producer, the world's largest, is finding that expansion is becoming increasingly expensive as global demand for commodities surges.
Vale is using record profits to increase production of iron ore, improve its rail and port facilities, and expand into new areas like nickel, copper and coal amid strong demand. Last year, it made capital expenditures of $4.2 billion.
"If the opportunities appear, why not," José Carlos Martins, an executive director of Vale, said in a television interview Sunday with Australian Broadcasting. "Nowadays to buy assets is very expensive. But if the opportunity appears, we will consider."
In January, the company, which is based in Rio de Janeiro, bought the shares it did not already own of Caemi Mineração e Metalurgia in a stock trade valued at about $1.46 billion. And last year it bought Canico Resource, the nickel miner, for 876 million Canadian dollars, or $792 million. The purchases were part of the plan by Roger Agnelli, the company's chief executive, to make Vale one of the world's largest diversified miners.
"Australia is very rich in resources so there is certainly a lot of potential for Vale to expand by either acquisition" or developing projects, said Eric Betts, an equities strategist at Nomura Australia in Sydney. "A big company like that could definitely do something. One hurdle is prices have gotten quite high here."
The S&P/Australian Stock Exchange 200 materials index has risen 44 percent in the past 12 months and is trading at 21 times earnings, compared with an 18 percent gain in the benchmark index, which is trading at 17 times earnings.
Australia has a record 34 billion Australian dollars, or $25.5 billion, of minerals and energy projects being developed as companies increase output to meet soaring demand led by China, the Australian Bureau of Agricultural and Resource Economics said last month.
"We opened our office here last year for coal exploration mainly, but we intend it to grow for other businesses," Martins said. Australia is "a very good environment for business. It's a low risk country" with "a lot of opportunities," he said.
Vale, BHP Billiton and the world's other largest miners are holding $32 billion in cash for possible takeovers as rising iron ore prices allow them to reduce debt and return money to shareholders, the accounting services firm PricewaterhouseCoopers said in a report this month.
Vale's main method of improving output and sales is by building new projects, what it calls greenfield developments, Martins said. "Greenfield takes time but it's solid. You pay a reasonable price for it and you build it brick by brick."
Vale remains locked in talks with Chinese steel makers over this year's price settlement for the benchmark price of iron ore, a key steel making ingredient. Vale and its rivals, Rio Tinto Group and BHP Billiton, have secured agreements from steel makers in Europe and the rest of Asia for a 19 percent increase this year. China, the world's largest steel maker, could set the benchmark price for iron ore as soon as next year, Martins said.
AQD Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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