By Paul Kiernan
RIO DE JANEIRO--Brazilian mining company Vale SA (VALE) said
Thursday it signed an agreement to obtain up to $2.5 billion in
financing from Bank of China, deepening its ties with the world's
No. 2 economy and top importer of raw materials.
Vale, the biggest producer of iron ore and a key supplier to
China's massive steel industry, signed a memorandum of
understanding with the state-owned commercial bank at a ceremony
with Brazilian President Dilma Rousseff and her Chinese
counterpart, Xi Jinping.
The financing may come in various forms, including syndicated
loans, bilateral loans, export credit and trade finance. The
agreement will be valid for three years.
"The MOU is designed to support Vale's business development and
strengthen partnerships between Vale and Chinese enterprises," the
Brazilian firm said. "The credit facilities would cover the
acquisition of equipment, goods and services in China for Vale's
projects in Brazil and overseas, among other financing
opportunities."
China's economic rise since the turn of the century has made the
East Asian country into the world's leading producer of steel and
importer of iron ore. Prices for the commodity, after hovering
around $30 a metric ton for decades, began to surge in the
late-2000s, peaking in recent years at $150 or more.
Vale increasingly has directed its business toward China as a
result. In the first quarter, China accounted for 33% of Vale's
$9.68 billion in operating revenue, compared with just 16% for
Brazil.
Write to Paul Kiernan at paul.kiernan@dowjones.com
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