Brazil - Economy & Business



Brazil - Business and Economy.
Brazilian Corporations.

Vale is the largest Brazilian mining corporation.

Latest financial results:
Year >201220132014201520162017
Ranking * #2 #2 #3 #3
Net Revenue ** 93,511 101,490 88,275 85,499
Net Profit 9,233 -254 219 -45,999
Ebitda 22,153 41,293 30,464 -14,348
Exchange rate *** R$ 2.04 R$ 2.34 R$ 2.65 R$ 3.90
Inflation rate **** 5.84 % 5.91 % 6.41 % 10.67 %
* Ranking among Brazilian corporations, by net revenue.
** All financial results are expressed in millions of Brazilian Real R$ million.
*** Official exchange rates of US$ 1, on December 31st of each year, to be used for accounting purposes.
**** Official Consumer Prices Index.

Vale - Mining business in Brazil - Latest News

Business industry: Mining.
Main competitors in Brazil: Samarco.

February 2016: Vale posts record loss, to sell core assets. "Vale also blamed its poor results on impairment charges and a 47% depreciation of the Brazilian real against the dollar last year, situation that increased the value of the company’s dollar-denominated debt."
February 2015: Vale posts loss as iron ore prices dive. "Brazilian mining giant Vale SA reported a net loss in the fourth quarter as iron-ore prices fell by nearly half, the local currency weakened and impairment charges continued to pile up".
February 2014: Vale announces financial results of 2013: Profit was down 98% from previous year. Vale decided to pay a billionaire debt with Brazilian Tax Agency, spanning period 2003 - 2012, concerning taxation of revenues and profits made outside Brazil.
February 2013: Vale Promises Turnaround after Posting Record Loss. "Vale yesterday posted a fourth-quarter net loss of $2.65 billion after writing down the value of some nickel, coal and steel assets, compared with a year-earlier profit of $4.67 billion."

Vale - History and Facts

Vale was born Vale do Rio Doce, which literally translates as Sweet River Valley.

The company started in business as a Government owned company, funded in 1942 to explore iron ore in the region of Rio Doce, in the State of Minas Gerais.
Vale was a piece of a comprehensive game plan, producing iron ore which would be processed by CSN (funded in 1941), which would send the steel to Ford make Brazilian cars in São Paulo.

Over the years, the company expanded operations to areas far from the Vale, and after the controversial privatization, there was an attempt to break links with the origins; the company adopted a new logo a new name, Companhia Vale do Rio Doce (see logo below).
Vale do Rio Doce

The Privatization
This paper brings a good narrative of the complex context which surrounded the privatization of then Companhia Vale do Rio Doce.
To summarize it: the proces was fair back to back; a minimum bidding price was defined by two independent auditing companies; the actual price paid was 20% above minimum.

The winning bidder was a Brazilian consortium, whose major members were: CSN, then the largest steel maker in Brazil; Bank Opportunity; and the pension funds of employees of Banco do Brasil, Petrobrás, Caixa Econômica Federal and Cesp.

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