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Vale (NYSE:VALE), the world’s No.1 iron ore producer and Brazil’s largest private company, expects to halve net debt to less than $10 billion by 2019 and use the extra cash flow to hike dividends.

The Rio de Janeiro-based company, which earlier this week threatened to flood the market with iron ore if prices get too high, has made of reducing debt its number one priority particularly under the helm new chief executive Fabio Schvartsman.

In November, the company signed a 14-year $2.7 billion project-financing package with Japanese industrial and commodity trading giant Mitsui for a giant Mozambican coal mine and infrastructure project.

Vale is now looking for a partner for its lossmaking nickel project on the South Pacific island of New Caledonia. Speaking to journalists in London Friday, Schvartsman said he would have no hesitation in mothballing it if it could not find a partner ready to acquire a 20 to 40% stake.

He added it expected to close a deal on the matter by mid-2019, Reuters reported.

Vale has said it wants to diversify its investments and improve capital allocation, which should lead to stronger financial results over the long term.

For now, the miner expects financial expenses to drop to $550m- $660m by 2020 from $1.6bn- $1.7bn this year, while it forecasts Ebitda to hit anywhere between $13bn-$19bn over the period.

Originally posted on: http://www.mining.com/vale-aims-halve-debt-10bn-2019/

Published: 08 Dec, 2017 By Cecilia Jamasmie