Brazil's mining giant Vale reports year-on-year hike in 2Q net earnings

Brazil's mining giant Vale, the world's leading iron ore producer, announced on Thursday net earnings of 3.7 billion U.S. dollars in the second quarter of 2010, 2.1 billion dollars higher compared to those of the same period in 2009.

Vale notched up 9.9 billion dollars in operating revenues in the second quarter, increased by 45 percent against the 6.8 billion dollars registered in the first.

Apart from that, other items such as operational income, cash generation and investments also saw significant increases compared to those of the first quarter this year.

The published figures were the best since the third quarter of 2008, Vale said in a statement, indicating that "value creation is gaining momentum."

"These results reflect a rising global demand for minerals and metals, operating costs under control and our efforts to increase production," said the same statement.

The company stressed the second quarter of 2010 is the beginning of the new iron ore pricing regime coming into force.

According to Vale, the move towards price flexibility brings more efficiency and transparency to iron ore pricing and allows the recognition of quality differences, which will help stimulate long-term investment.

"In addition, the new pricing regime allows clients to know beforehand the price to be paid in the following quarter, which facilitates cost control and inventory management," Vale said.

Source: Xinhua