Moody's changes Vale's outlook from negative to stable amid output recovery

Thursday, 05 September 2019 16:45:02 (GMT+3)   |   Istanbul
       

International credit ratings agency Moody’s has affirmed that it has changed the outlook for Brazilian miner and iron ore producer Vale from negative to stable and has affirmed the company’s Ba1 rating.

The agency’s outlook factors in higher visibility on the costs and financial debts caused by the Brumadinho dam accident. Apart from that, Vale has provisioned $6 billion in the first half of this year for socioeconomic and environmental recovery activities in the areas affected by the accident, which will be spent mostly during 2019-2021.

Moody’s stated, “As Vale continues to generate positive free cash flows, we do not expect a significant impact in the company’s liquidity.”

Another factor affecting the agency’s decision was the gradual return of operations following the accident. Vale has recovered about 42 million mt of iron ore capacity out of the 93 million mt lost or suspended due to the accident and expects to gradually recover 20 million mt by 2020, and to recover the remaining 30 million mt in about two or three years. 


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