Vale, a world leader in the industry, will soon adopt a less aggressive investment strategy, after investing nearly $ 15 billion in billion dollars to build the world's largest integrated railway project. The main focus now is to treat the financial market well, to reward shareholders better, Fabio Schvartsman, president of State / broadcast. Influenced by the worst crisis in its history – the disruption of the Samarco dams in Mariana (MG) at the end of 2015 – the Brazilian giant, scia in the company with the Australian BHP, is trying to resume the operation there. Schvartsman said that everything will be rebuilt.
What are Vale's expansion plans?
Vale has a special moment, a combination of an excellent worldwide scenario of iron ore and a future opportunity to develop the field of base metals. The volatility of mining prices fell. Vale is already well positioned in high-quality raw materials, with the Carajs project (S11D).
What are future investments in this scenario?
Before we answer this question, we must not forget that Vale has completed a major investment. We will limit our annual production to 400 million tons of ore. Our capacity of 450 million. This reserve will be used when the mine prices rise again. Vale lived the supercycle. But at the end of the day it was a disaster for companies.
Vale considered the acquisition of Xtrata during the supercycle …
Not only (Anglo-yours) Xtrata, but the (Canadian) Alcan. We have made the acquisition of Inco, nickel and copper (in Canada). Vale came in without realizing that she understood nothing about it. Iron ore is a logistics company. Important scale.
But is Vale still in a hurry to buy assets?
Changes that we make as soon as you enter. The most important thing I did (the executive took over in May 2017) was not only prdio (from the head office of Vale), but from the government. The only way to make the business better is not subject to undesirable pressure.
What are your plans for Vale given the problems of obtaining licenses?
We believe that it is currently very important to treat the stock market properly. We will pay large dividends on the basis of an aggressive policy that has already brought US $ 2 billion to shareholders (already approved), we came to stay. In addition, we have separated US $ 1 billion to buy back Vale's shares.
Why this movement?
We want to give certainty and predictability to those who buy the shares. Vale must be more predictable.
But was not it sooner?
Vale promised too much and gave up. That is the difference. We must be transparent and the government important. Without the figure of a controller (which ceased to exist in 2017 with the social restructuring), the influence of a third party becomes much smaller. There is no longer a controller here. Who decides a number of shareholders.
What did the company promise and did not deliver, for example?
Vale had a period of euphoria with the supercycle, when all mini companies reached stratospheric prices. S that after the euphoria the depression (of prices) came. Vale tried to promise that it would produce results, but because the scene remained poor, this did not work out. You have to promise what the facts are.
How do you do that?
Creating value for the company, just like us. We have a kind of mineral, which is a reference, based on the mixture of raw materials of low quality with high quality. We have produced about 100 million tons of this mineral, out of a total of 400 million tons of our production.
Has the sale of assets been completed?
Yes, after the governess it was one of our best programs. It helped reduce debt by half in the last 12 months, from about $ 22 billion to $ 11 billion. Result of a combination of divestment and improvement of business activities.
What about new investments?
The estimate of US $ 8 billion between 2019 and 2020. Vale will make investments where there is a return. We will not diversify in the short term. Now make organic growth and small acquisitions that are logical for our projects. For example, we will develop projects in nickel and copper.
Out of the country?
No. Our reserves are actually in Brazil, the big market of Vale.
So you went back to the marketing campaign?
Vale is an extremely important company for Brazil. And Brazil is extremely important for Vale, especially in Minas Gerais, Par, Esprito Santo and Maranho, where most of our activities take place. The board of directors of Vale understands that the company is obliged to take good care of the surrounding communities. Vale has always done well what it has promised to do. We just want to go there.
But there is an image crisis after the Samarco accident …
The Renova Foundation (Samarco, Vale and BHP) has delivered excellent work. (Renova) has the right to be heard opened. The rupture of the dam was a disaster. Nobody did it in the case. An agreement (with the Federal Government Ministry and other authorities) was concluded, but the process was slow. We do everything to repair everything.
Has your image been restored from this image?
I prefer to say that I want Vale to become a reference for sustainability in Brazil and in the world. That there is a very clear recovery of value in the company. The more valuable Vale is, the better for its shareholders and employees and the Pas.
Are election uncertainties important for Vale?
First, Vale will have to work with every government, regardless of who is elected. Everything Vale does depends on concessions. So he has a relationship with the government. There is no doubt. And it must be a natural relationship.
After 11 years absence from the average, my company Vale launched an advertising campaign last Sunday inviting the Pass to rediscover the brand. "Vale is an exporter of goods, minerals, far from people, but a Brazilian jewel," says Schvartsman. "Can not be closed in glasses."
The slogan of the new pieces of the mine campaign "Rediscover our nature". The nickname was chosen three years after the breach of the Fundo dam, in Mariana (MG), which belongs to Samarco, a company of which Vale scia, along with BHP. Tragedy, which killed 19 people, was considered the biggest environmental disaster in Brazilian history. The amount invested in the campaign has not been disclosed.
Schvartsman says the company will not shrug off responsibility and that "Samarco is more of a social problem than money." Vale excludes the company's out-of-court recovery and resumes talks with creditor banks. Information from the newspaper The state of S. Paulo.