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Brazil miner Vale says deal on hold pending Xstrata stakeholder decision

Brazil miner Vale says deal on hold pending Xstrata stakeholder decision

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 said.
"There is a limit and we already arrived there. It's up to them," he told a news conference held to discuss Vale's record 2007 profits and fourth quarter earnings.
Earlier on Friday, Agnelli told analysts that the next step is for Glencore "to say if they want to go ahead or not."
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 to extend 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."
"The whole question is not just price, but also principles, how to do business," he later told reporters.
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 told analysts. "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), and have suggested that Vale wants to pay as much as US$30 billion (euro19.8 billion) of that 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.
Agnelli declined to comment Friday on the value of the deal, saying there has been "too much speculation and none of the speculation hit the target."
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.
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AP Business Writer Alan Clendenning contributed from Sao Paulo, Brazil.


Updated : 2021-05-06 08:14 GMT+08:00