Brazil’s Vale loses Latin America’s most valuable company spot

RIO DE JANEIRO, BRAZIL – With Vale’s stock down 32% from its late July high in dollars, the mining company is now behind Mercado Libre, the e-commerce giant currently valued at US$90 billion after the strong performance of its fintech business in the last quarter.

The shift in the ranking – with a new economy platform taking over the top spot from a 79-year-old raw materials producer – may take hold amid China’s efforts to clean up its industrial sector, which have driven iron ore below US$100 a ton.

Last week, UBS announced a double downgrade of its recommendation for Vale ADRs from buy to sell, while Bradesco BBI sees risks in a volatile environment for down-trending commodity prices. Should iron ore trade at an average of US$90 next year, Vale’s EBITDA could fall below the consensual estimate for 2022 by 38%.

The impact on Vale could have been even worse had the mining company not announced US$13.8 billion in shareholder dividends so far this year.

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