Vale do Rio Doce's blockbuster acquisition of Anglo-Swiss miner Xstrata is on hold while Xstrata's major shareholder considers the proposal, Vale chief executive Roger Agnelli said Friday.
Talks are continuing between Brazilian mining giant Vale and Xstrata shareholder Glencore International AG, but it's up to Glencore to push them forward, Agnelli told analysts on a conference call. "It is in their area, in their position to say if they want to go ahead or not," he said.
Glencore spokesman Marc Ocskay declined to comment, and a spokesman for Xstrata could not be immediately reached.
Agnelli did not specify what could hold up Vale's purchase of Xstrata for as much as US$90 million (euro59.3 million). But the Financial Times newspaper reported that Glencore, which owns 34 per cent of Xstrata, wants an extension of its agreements to sell commodities that Xstrata produces, including coal and nickel.
Agnelli suggested that Vale wasn't willing to compromise on that sales issue, telling analysts that "marketing is very important to us. We want to have a very open and straightforward relationship with our clients."
But Vale still has a good chance of acquiring Xstrata, Agnelli said.
"If we solve some of the principal issues, we are going to be in a position to close the deal," Agnelli said. "Let's be optimistic."
Vale, the world's largest iron ore miner, confirmed last month that it was in talks that could lead to a purchase of Xstrata PLC. Leading Brazilian newspapers reported the price could go as high as US$90 billion (euro59.3 billion).
The company has not commented on the deal's value, or on reports that Vale wants to pay as much as US$30 billion (euro19.8 billion) of the amount in stock.
The purchase would be the largest ever made by a Brazilian company. Vale two years ago paid US$17.6 billion (euro11.6 billion) for Canadian nickel miner Inco Ltd.
Profits for Vale, the world's second-largest mining company after Anglo-Australian BHP Billiton Ltd., soared 31 percent in the fourth quarter of last year on strong worldwide demand for metals and iron ore, steel's raw ingredient, the company reported Thursday night.