Deutsche Bank said Vale should consider selling as much as a 20 percent stake in its Northern System operations, which includes the Carajas mine—one of the largest in the world.
The move could help the Brazilian iron ore producer to "regain control of its destiny" amid a huge drop in iron ore prices, Deutsche Bank analyst Wilfredo Ortiz said.
The bank analyst called Vale's balance sheet "precarious," estimating the iron ore producer funding gap could climb to $10 billion under a distressed pricing scenario for iron ore at $45/mt by the end of 2017.
The bank’s negative forecast for the commodity’s price differs from the estimate of sources SteelOrbis talked to recently.
According to a Brazilian trader, the product’s price could recover in 2016, reaching an average FOB $70-80/mt price range.
In February this year, Vale's iron ore export volume totaled 20.5 million mt, increasing by 9 percent year-on-year and up by 1.11 percent compared to January, according to Brazil's National Union of the Industry of Extraction of Iron and Base Metals (Sinferbase).