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PrintOctober 16, 2008 BRAZILIAN mining giant Vale has signed a new long-term contract with Corus Group to supply iron ore to its plants in Europe.
Under the deal, which Vale claims is one of the largest-ever iron ore deals, the Brazilian company will supply approximately 63 million tonnes of ore to Anglo-Dutch steelmaker Corus over the next five years.
“This contract is aligned with Vale’s and Corus’ desire to further strengthen their relationship, which started in 1942 - the same year of Vale’s foundation,” Vale said in a statement.
The contract covers only supply of the key steelmaking raw material. Price contracts are negotiated on an annual basis between iron ore suppliers and steelmakers.
The deal comes amid uncertainty in the global mining industry. Vale had recently pushed for an adjustment in iron ore prices from Asian steelmakers, which pay lower prices than their European counterparts. Asian steelmakers, especially Vale’s largest customers in China, had resisted the move.
Earlier this year, Vale negotiated iron ore price increases of between 65 per cent and 71 per cent, depending on the quality of ore.
Australian rivals BHP Billiton and Rio Tinto then topped Vale’s deal, securing a freight premium for their ore.
Mining shares have been hammered in recent weeks amid concerns about a slowing global economy and its effect on demand for commodities.
Vale’s shares were battered Wednesday in trading on the Sao Paulo Stock Exchange, plummeting 15.2 per cent to $US10.85.
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