Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Brazil’s Vale, one of the world’s largest miners, reported a first quarter net profit down 59% from a year earlier, far below analyst expectations, as profits were dragged down by weaker sales and lower iron ore prices.
The company posted a net profit of $1.8 billion for the first three months of 2023, in a filing to Brazil’s main stock exchange on Wednesday, while analysts polled by Refinitiv had forecast a profit of $2.4 billion.
Last week, the miner had already reported a slip in iron ore sales volume, blaming it on port loading restrictions and supply chain rebalancing after strong sales in the previous quarters.
Revenues, meanwhile,fell 22% to $8.4 billion, also lagging analysts’ $9.2 billion forecast. Meanwhile, costs rose 5.4% to $5.4 billion.
Earnings before interest, taxes, depreciation and amortization came in at $3.6, below analysts’ $4.3 billion estimate.
Over the quarter, Vale said that prices for its iron ore had averaged $108.6 per tonne, down from the $141.4 per tonne it reported for the same period last year.
(By Peter Frontini; Editing by David Alire Garcia and Sarah Morland)
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