The board of Vale, a Rio de Janeiro-based mining company, approved a total of 10.57-billion reals ($2.1-billion) in dividends and interest on capital to be paid to shareholders, and the buyback program can reach as many as 150-million shares for a combined total of $4 billion in payments.
Shares of Vale extended gains on the back of the news, and closed up 2.1% at 65.30 reals in Sao Paulo, according to Mining Weekly.
Earlier this month, Vale, a Brazilian iron-ore and nickel giant, reported a year-over-year drop in iron ore output. At the same time, iron ore prices have fallen sharply from highs in mid-March amid concerns over consumption in China which can lead to mills curbing output despite efforts from Beijing to support the economy and the property sector.
The payout plan is the result of improving cash generation and the funds expected from the sale of a stake in Vale’s base metals unit, according to people familiar with the matter cited by Mining Weekly. Vale has said it expects that transaction with Saudi Arabia’s sovereign wealth fund to be approved in the first quarter of 2024. The final amount for the investor-reward program will be based on profits for the period ended September 30. The payment will be made on December 1.
Last week Vale reported adjusted earnings before items of $4.5 billion for the latest quarter, 12% above the year-ago period, and also up from the previous quarter.
Theodor Lisovoy, Editor in Chief of the European bureau, Rough&Polished
