Word: vale
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Dates: during 2000-2009
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Already the world's largest producer of iron ore and one of the largest producers of nickel, Vale is also a growing force in copper, manganese, bauxite, precious metals, aluminum, coal, steel and energy. Its stock price has more than doubled in the past year, to nearly $33, and the company's market value is about $160 billion, 16 times what it was in 1997. Douglas B. Silver, an industry veteran and CEO of Colorado-based International Royalty Corp., calls Vale "the most effective giant mining company in the world," not just for its size but also for its skill...
Roger Agnelli, a 48-year-old investment banker, became CEO in 2001. He inherited a company whose historic strength lay deep in the Amazon, in the massive iron-ore deposits of Carajas. Iron ore then accounted for 75% of Vale's revenues, and Agnelli's first move was to consolidate domestically, by selling off peripheral holdings in paper and forestry (Agnelli's family business) and using the proceeds to swallow eight rival firms. This gave the company new reserves and more sway over prices to the domestic steel industry, just before the commodities boom really kicked off in 2003 with...
...Vale's biggest deal came in October 2006 with its $18 billion purchase--in cash--of Inco, a Canadian firm with nickel assets across North America and as far away as the French territorial island of New Caledonia in the Pacific. The acquisition came just before nickel prices nearly tripled. Inco now accounts for about 40% of Vale's revenues, and gained the company important technology and highly skilled personnel. "It was a major step for us," says Tito Martins, executive director for corporate affairs and energy at Vale. More recently, Vale has made a play for Swiss miner Xstrata...
Agnelli has enjoyed superb timing, but mining analyst John Tumazos says Vale's real edge is a willingness to explore the new mining frontier, in developing countries, years before the competition. "Things don't frighten them so much because they are used to ups and downs," Tumazos says. In New Caledonia, for example, Vale inherited a nickel project that had stalled because of concerns from residents. Vale flew some of the locals to the Amazon to show off its environmental stewardship; the project is now on track, along with 29 others in Mongolia, Mozambique, Gabon, Oman and Australia...
...newly spread wings, Vale's home base is firmly in Brazil. When its three new joint-venture steel projects (with German, Chinese and Korean partners) come online in Brazil next year, Vale will be supplying 70% of demand--a commanding position that even a state-owned firm might envy.n