Fitch reaffirmed, on Thursday (17th) night, Vale’s long-term ratings in foreign currency and in local currency at BBB, maintaining a stable outlook. The senior unsecured debt rating of Vale Overseas Limited and Vale Canada Limite was preserved at BBB, while the company’s national scale rating was AAA (bra).
According to the agency, the decision reflects the company’s leading position in the seaborne iron ore market, with one of the lowest cost levels in the sector. The institution also considers that the mining company has a “strong” capital structure.
Fitch adds that global supply bottlenecks amid the Russian war in Ukraine, weather events in Brazil and Australia and still-resilient Chinese demand have helped keep iron ore prices high. “Cash flow from operations is expected to remain high in 2023, at around US$13.7 billion, before capex and dividend distributions,” he projects.
The Brumadinho Remediation Agreement entered into between Vale and the government of Minas Gerais is incorporated into the rating, according to Fitch.
The agency assesses that the note is pressured by production concentrated in iron ore and strong exposure to Brazil.
Source: CNN Brasil
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