Brazil: Vale nets 19.4 billion reais with share offer

6 August 2008

Rio de Janeiro, Brazil, 6 Aug – Brazilian mining group Vale, formerly CVRD, has pocketed 19.4 billion reais after selling 256.9 million ordinary shares and 189 million preference shares on the Sao Paulo stock exchange (Bovespa).

Announcing the share offer in June, Vale predicted it would generate US$ 15 billion to sustain its investments in organic growth and also fund possible acquisitions.

As part of the share offer, 63.5 million class-A preference shares were offered and 80 million ordinary shares in the form of American Depositary Shares (ADS) represented by American Depositary Receipts (ADR).

The total number of shares offered took into consideration 24.66 million class-A preference shares issued by Vale due to the exercise of over-allotment by the bank coordinating the issue, Credit Suisse.

In July 2007, Vale was awarded a contact by the Mozambican government to develop coal mines at Moatize with estimated reserves of 2.5 billion tons over a 25-years concession.

Vale plans to mine 11 million tons of coal yearly, some 8.5 million coking coal for the metal industry and 2.5 tons of coal for power generation. With total investments of US$ 1.398 billion, the Moatize mine will begin production in the first quarter of 2011. (macauhub)