A possible public listing of a stake in the base metals unit of Brazil’s Vale SA depends on a rally in nickel prices of around 20 percent, its CFO, Luciano Siani, has announced. He stated, We want to see nickel prices above $20,000 per ton in order to consider such an option.
Vale, the world’s largest producer of iron ore, commented it was considering an initial public offering of 30 to 40 percent of its base metals division, because the unit was undervalued by the market. Siani said that if nickel prices reached $21,000 per ton and copper $6,600 per ton next year, the company would meet the lower end of its 2015 target for the base metals unit of $4 billion to $6 billion in earnings before interest, tax, depreciation and amortisation (EBITDA).
If copper and nickel reach those levels, the unit would be worth $30 billion to $35 billion, he estimated. If the price increases do not materialize, the IPO is not an option, he added.