Vale ( NYSE: VALE ) closed -2.1% to a YTD closing low of $12.43 on Wednesday after Q2 iron ore production missed estimates and it lowered iron ore and copper guidance for the year .
The lackluster results risk delaying a potential sale or spinoff of the copper and nickel unit that could be worth $40B, Bloomberg reports.
Vale ( VALE ) has been looking for alternatives to unlock value at its base metals unit, which accounted for nearly 15% of total revenues in 2021, although it has not decided whether it would spin off the division or possibly merge it with the assets of another company.
The process of stabilizing Vale's ( VALE ) base metals operations "remains rocky" amid operational setbacks and extended maintenance, Banco Bradesco BBI analyst Thiago Lofiego said.
Vale's ( VALE ) difficulties may be marginally supportive for iron ore prices, but the stock's discount to Australian mining peers could expand, given "lower confidence on operational stability/execution," Banco BTG Pactual SA analysts said.
Plagued by weak economic growth in China, iron ore prices recently plunged below $100/metric ton to their lowest since December .
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Vale suffers setback in plan to turn around base metals mining unit