(Reuters) – The chief executive of Brazilian iron ore miner Vale SA said on Thursday the company has stopped looking into a spin-off for its base metal division, a longstanding plan of the company.
“We are not talking about a spin off yet. The problem here is the size of the business,” said Eduardo Bartolometo, Vale’s Chief Executive Officer as part of the Financial Times’ Mining Summit.
The remarks appear to walk back a longstanding plan to sell the unit, that was still being considered as recently as April of this year. Still, the plan had first been developed in 2014, postponed to 2015, and then the idea was temporarily abandoned.
Bartolometo said part of the problem was the value of the business, saying it brings in $3.5 billion in revenue a year, which would put a sale value at several multiples of that.
Vale, one of the world’s largest iron ore miners, is still dealing with the consequences of a dam burst in 2019, which killed 270in the town of Brumadinho.
Aside from the lives lost, the environmental damage, fines and complicated legal proceedings that targeted its top executives, the incident also depressed the company’s value.
“We are perceived as a risky stock,” Bartolometo said, adding however that “Vale did the homework. Now it’s not a risky company.”
(Reporting by Marcelo Rochabrun; Editing by David Gregorio)
