IN THEORY, VALE has the perfect business model for today’s global economy: revenues that are dependent on buoyant commodity prices and continuing strong demand from the emerging markets on which the Brazilian mining company relies for its exports. In practice political intrigue surrounds the replacement of chief executive Roger Agnelli with Murilo Pinto de Oliveira Ferreira, which unnerved some equity investors. There have also been production problems at some of Vale’s mines.
There has certainly been no issue, though, with the company’s ability to produce money. Its second-quarter results set new benchmarks, and Vale’s CFO, Guilherme Cavalcanti, is a study of relaxed confidence during his meeting with Euromoney. He can afford to be sanguine during the mid-August interview, which takes place amid what can be soberly described as mayhem on the financial markets. Gold prices were pushing into implausible new territory. Global stock markets were being routed, dragging Vale’s share price down 15% from the start of the month.
