DBRS Releases Report on Vale S.A.

DBRS has today released a report on Vale S.A. (Vale or the Company) that provides further detail on the recent confirmation of the ratings of the Company and its subsidiaries at BBB (high) with Stable trends.

Vale is one of the largest mining companies in the world, with a solid business base as the world’s largest iron ore producer, as well as rising outputs of nickel, copper, fertilizers and other materials. Nonetheless, the Company’s credit metrics have weakened due to lower prices for commodities important to Vale, especially iron ore products; higher debt levels due to high capital spending for growth projects; and the uncertain outlook for iron ore prices, with growing production capacity in an industry already experiencing pricing pressures.

DBRS expects commodity prices to be on average lower in 2013 than in 2012, resulting in lower net income for the year despite a number of new coal, copper, nickel and logistics operations coming on stream or ramping up. In addition, over the medium term, added productive capacity is expected to significantly increase the Company’s earnings power.

Accordingly, with Vale’s investment activity expected by DBRS to remain high, the Company will need to remain prudent in its growth initiatives if it wishes to maintain its balance sheet strength.

To obtain a copy of the report or the August 22, 2013, press release, please see the links below or contact us at info@dbrs.com.