Vale SA CFO Says IPO Of Company's Base-Metal Business Could Be Considered

Although oil has tanked drastically in the last few months, so have other commodities. The metal and mining industry is witnessing tough times on the back of fall in commodity prices as well as demand.

One of the rising stars of the sector, Brazil-based Vale SA (ADR) VALE has seen its stock collapsing by over 30 percent in the last three months alone.

Luciano Siani, chief financial officer of Vale, was on Bloomberg Tuesday to discuss the outlook of the iron ore industry and the company’s plans for its base-metal unit.

"We are in the middle of a journey. We still have two strong years of expanding until we get to the point that we have completed our investment program and we are working very hard in order to reduce that spending and try to do the same projects with less amount," Siani said.

On the fall in iron ore price, Siani said, "I think we are going through adjustment, a healthy adjustment. There is a lot of capacity, about 200 million tons of iron ore capacity, which is uncompetitive at current prices. Yesterday we had a big African miner announcing the shutdown of a 18 million-ton mine. So, Vale is one of the most, perhaps the most competitive iron ore company in the world. So, we are very confident that after this adjustment period goes through that we will see prices recovering from this overshooting."

Queried about the possible IPO of the company’s base-metal business, Siani replied, "...we'll consider all the options to add value to shareholders and that IPO could be considered."