Bradesco BBI maintains buy recommendation for Vale (Image: Reuters)
O Bradesco BBI maintains its recommendation of buy for the Vale (ELECTION 3), even in a scenario where the company's investment thesis remains highly dependent on China. In the view of Rafael Barcellos and Renato Chanes, who signed the report, the fundamentalist outlook for the mining company has improved significantly in recent months.
Looking ahead, they say investors will seek more visibility on a possible agreement related to the Mariana (MG) accident, expected to be the next risk-reducing event for the thesis.
“We maintain our Buy recommendation for VALE3, with shares trading at an attractive 3.7x EV/Ebitda multiple for 2025.”
Last week, the Minister of Mines and EnergyAlexandre Silveira, stated that Vale, BHP and Samarco could close a global agreement for reparation and compensation for the dam collapse in Mariana that would involve total payments of R$167 billion, including new money, works carried out by the mining companies and payments already made.
“Now we have reached R$100 billion in new money, and we were talking about R$49 billion in 2022…”, said Silveira, in an interview with Itatiaia radio.
In response to the minister's comments, Vale confirmed in a statement that negotiations on the agreement to compensate for the Mariana disaster are advanced, “based on proposals previously presented and disclosed by the parties”. However, to date, no definitive agreement has been reached.
“The Company expects to reach a final agreement in the mediation process in October 2024, which will be duly disclosed to the market,” it said.
Vale's new CEO's term brought forward
Vale has brought forward the start of its new CEO's term, Gustavo Pepper, to start on October 1st and no longer in January, as planned, shows a relevant fact sent on the night of last Friday (20).
In the document, the company thanked Eduardo Bartolomeo, who had been at the helm of the company since 2019.
“Under Eduardo’s leadership, Vale has managed to make significant progress in its cultural transformation, with a focus on the safety of people and operations, risk management and asset integrity,” he says.
Furthermore, the company highlights that it has adopted a pioneering dam decommissioning program, implementing the best global standards for the management of tailings containment structures.
Bartolomeo replaced Fabio Schvartsman after the Brumadinho tragedy. The executive had been with the company since 2011 and held several leadership positions before becoming CEO.
Vale also reported that it approved the appointment, on an interim basis, of Murilo Muller, current global director, to the position of executive vice president responsible for the areas of finance and investor relations, a position that Pimenta held, starting on October 1 and ending until December 31, 2024.
*With information from Estadão Conteúdo and Renan Dantas