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Vale bought the company Ferrous Resources

Vale, the Brazilian iron ore Corporation is implementing a new acquisition. So she buys a controlling stake (77%) Ferrous Resources. This is a small Brazilian iron ore company. Previously it was owned by the company Icahn Enterprises. The acquisition cost the Corporation at $ 550 million. In addition, she will have to repay all the debts of the company. It is expected that the final transaction will be issued next year. So plan participants.

A company Ferrous Resources owns five iron ore deposits. Four of them are located in the state of Minas Gerais. Another field is located in the state of Bahia. The total volume of reserves is about 4 billion tons. Every year the company produces about 5 million tons. We are talking about the concentrate, which contains 62% iron. The products are sent for export. Consumers it is China and other Asian States.

The company has ambitious plans for the future in 2010. It is planned to increase production to 15 million tons per year. Over time, the volume had increased to 50 million tons. However, companies had to abandon these projects. The reason was the falling prices of iron ore. Depreciation was recorded in the period 2014−2016. Because implementation plans were meaningless.

As for Vale, the company chose the path of small profitable acquisitions. This was previously said by the Director General. Such acquisitions allow to achieve significant savings. This may be possible thanks to integration with existing assets. The acquisition of Brazilian Ferrous Resources suitable for such plans. At the end of the 2018 Vale intends to reach 390 million tons. In 2019 it plans to increase to 400 million tons.

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