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Vale SA To Raise Capital; Sell Ships And Stake In Africa Project

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Vale SA (NYSE: VALE) is looking to raise capital by cutting its stake in an East African mining and railway project and selling up to 15 sea-going vessels worth up to $1.5 billion, an analyst said Wednesday.

Vale, a Brazilian-based mining company whose shares have been hurt recently by falling ore prices, may cut its stake in an unfinished railroad project in Mozambiqe to 35 percent, from 70 percent.

Vale is also mulling the sale of a minority stake of its related Moatize mine. A buyer for the stakes hasn't been determined, according to analysts from the Brazilian banker Brandesco.

The analysis was reported Wednesday by Bloomberg news service.

Vale expects its moves on the Mozambique project as well as Brazilian currency depreciation will cut 2015 capital spending below its earlier forecast of $13.8 billion.

Construction on the roughly 400-mile rail project was launched last year and is to link Vale's Moatize coal mine with the export Port of Nacala, in north-eastern Mozambique. The rail project lacks $3.3 billion necessary for completion.

The Nacala project was disrupted last month by violent protests from area residents who reportedly believed Vale reneged on promises regarding local development projects as well as wages.

Posted-In: Analyst Color News Asset Sales

 

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