Vale delays IPO of base metals division, reports 3.2 billion loss
Vale is delaying the timeline of a possible IPO of its base metals division after an expected rebound in nickel prices failed to materialize.
Vale had said in December it was considering selling 30%-40% of the division around August, but CEO Murilo Ferreira now says the new goal is to be ready to present a recommendation to Vale’s board by the end of this year for possible action in 2016.
Vale execs had been expecting nickel prices to rise to ~$21K/metric ton but the company instead sold its nickel for an average $14,279 in Q1, citing a slowdown in Chinese housing construction and bearish sentiment regarding Chinese economic growth.
Vale posted a $3.2 billion loss in the first quarter of 2015, its third straight quarterly loss.
Weak iron-ore prices – the company’s main commodity – and the depreciation of the Brazilian real contributed to the loss.
Vale’s base metals division, which includes nickel and copper production, posted net operating revenues of $1.7 billion in the first quarter, and costs of nearly $1.1 billion.