Vales Posts Loss as Iron Ore Takes Bite out of Revenue

Vale released  results showing that it had lost $1.44 billion prompted by a fall in the price of iron ore, higher production costs and a slumping Brazilian currency.

According to Reuters:

The world’s largest producer of iron ore mined a record amount of the steel-making ingredient during the quarter, but Vale’s slight rise in production was not enough to offset the plunge in price. The rise was also below rivals Rio and BHP who have successfully increased production and cut costs in recent years.

Iron ore cash costs were also higher than analysts had expected, while Vale said the weakening Brazilian real wiped nearly $2 billion off its earnings by increasing the cost of dollar-denominated debt.

Alex Hacking, an analyst at Citi, said:

Vale’s funding challenge in 2015-16 may be steeper than expected.

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