Vale Wants Porto Sudeste Without Paying Cash for It

Brazil's Supreme Court has formed a majority to uphold a foreign profits tax on overseas subsidiaries, including Vale. The vote is part of an ongoing virtual session closing on 28 August 2026. The tax, disputed since 2001, affects corporate income tax and social contributions. Vale's potential liability is estimated at R$22 billion (US$4.26 billion). The court's final ruling is not yet certain, as any justice can request a review.

Iron ore prices rose 0.35% to $95.28/tonne on August 18, 2026. Vale's NY shares fell 0.51% to $13.68, despite the commodity gain, due to cost concerns. Rio Tinto dropped 0.53% to $96.69. Vale's cost guidance increased, impacting margins. China's steel output fell 3.1% YoY, but iron ore imports rose 6%, supporting prices. Analysts' target prices for Vale range from $13.78 to $17.11.

Vale said its Base Metals unit is expanding the Salobo copper mine in Brazil with a coarse particle flotation upgrade adding about 30,000 tonnes of annual production. Throughput would rise to 42 million tonnes per year, including about 15,000 oz gold byproduct. Capital cost cut to about $215 million, with Wheaton funding $40 million. First production targeted for H1 2028.

Copper futures neared record highs after a boiler leak forced Indonesia’s Gresik smelter to shut for assessment and repair, tightening supply tied to the Grasberg mine. LME three-month copper was about $14,195.50/tonne. Aluminum rose after Norsk Hydro said its Alunorte refinery cut alumina output to half capacity due to natural gas disruptions. Freeport-McMoRan and other miners fell.

Vale raised 2026 iron-ore cost guidance, expecting C1 cash costs of US$22.50 to US$23.50 per tonne and all-in costs of US$58 to US$62, versus prior US$20 to US$21.50 and US$52 to US$56. It cut 2026 all-in copper to US$0 to US$500 per tonne and nickel to US$10,000 to US$11,500. Vale cited exchange rate and diesel for iron-ore costs and reported strong EBITDA but EPS missed expectations.

Bloomberg reported that some commodity trading firms stopped dealing with private iron ore trader Radiant World over concerns it provided banks with falsified documents. Deutsche Bank and KBC froze some Singapore accounts, while Arab Bank Switzerland stopped new letters of credit and ICBC Standard Bank suspended repo financing, according to people familiar. Rio Tinto and Vale removed Radiant World from approved customer lists. Radiant World denies wrongdoing and says it is well capitalized; annu