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Iron Ore Drives Record Profits for Vale

A rise in demand for iron ore along with a new price regime brings the world's second-largest mining company Vale record profits and revenue in the third quarter for 2010.

The Brazilian mining giant is the world's largest producer of iron ore globally. As per the company, cash generation before interest, taxes, debt and amortisation rose to $8.8 billion.

Its previous record for cash generation was in the third quarter of 2008 at $6.4 billion. The new price system was adjusted quarterly and linked to the Chinese iron ore spot market. This pricing regime was implemented by BHP Billiton, Rio Tinto and Vale in preference to the traditional benchmark system of one year long contracts.

The new system delivered an increase in price for iron ore to the tune of 90 to 100% in the second quarter and the average price of iron ore rose by another 39% in the third quarter. The recovery of the demand of iron ore globally is also pushing prices to un-scaled heights.

Vale also announced that it was planning to double its investments in 2010 to $24 billion. Part of this money would be used to fund expansion into the fertiliser production industry.

Joel Scanlon

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Joel Scanlon

Joel relocated to Australia in 1995 from the United Kingdom and spent five years working in the mining industry as an exploration geotechnician. His role involved utilizing GIS mapping and CAD software. Upon transitioning to the North Coast of NSW, Australia, Joel embarked on a career as a graphic designer at a well-known consultancy firm. Subsequently, he established a successful web services business catering to companies across the eastern seaboard of Australia. It was during this time that he conceived and launched News-Medical.Net. Joel has been an integral part of AZoNetwork since its inception in 2000. Joel possesses a keen interest in exploring the boundaries of technology, comprehending its potential impact on society, and actively engaging with AI-driven solutions and advancements.

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