Brazil Mining Mogul Batista Wants Vale To Expand Steelmaking Operations
October 13 2009 - 1:47PM
Dow Jones News
Brazilian mining mogul Eike Batista, who declared his intention
of seeking a minority stake in miner Vale SA (VALE, VALE5.BR) over
the weekend, has outlined his vision for the company.
According to a spokeswoman for Batista, the billionaire
businessman wants Vale to make more use of its metals raw materials
in Brazil by increasing its steelmaking business.
"Vale could add more value to the products it exports," Batista
said.
Vale produces around 300 million metric tons of high grade iron
ore a year and exports the majority.
"Vale could also be an instrument to give more efficiency to the
country's logistics. Looking from the outside I can glimpse loads
of uncut diamonds at Vale that need polishing," he said.
Vale already operates two heavy-haul freight railroads, which
are among the world's busiest and most efficient.
As part of his strategy for Vale, Batista said there was a lot
of room for steelmaking, but company president Roger Agnelli has
held the position that the company shouldn't compete with its
steelmaking clients.
Batista's attitude toward Vale is in line with that of President
Luis Inacio Lula da Silva, who recently criticized Agnelli for not
investing more in Brazil and creating more jobs.
Lula was upset late last year when Vale was quick to lay off
workers at the height of the global financial crisis. Lula has also
indicated that he thinks Vale should make more use of raw materials
in Brazil.
"You don't need to make the final product. But at least make
semifinished goods," Batista said.
"Vale is of a sufficient size to do some projects to benefit
Brazil," he added.
Batista also criticized Vale's attempt to buy Xstrata Plc
(XTA.LN) last year as an example of the company ignoring the
development of better assets at home.
Batista said Xstrata's mining assets aren't world-class, as
Vale's are.
"Would you mix caviar with bones?" he asked.
-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086;
John.Kolodziejski@dowjones.com