Brazilian mining group Vale is in no rush to finish iron ore price talks with Chinese steelmakers and sees little possibility they could buy ore on spot markets, the company's chief executive said on Thursday.
"We are speaking with Chinese clients. What we want is to arrive at good terms, but we have to give it time," Roger Agnelli told a news conference in Rio de Janeiro.
He rejected the idea that Chinese steelmakers could turn to spot markets beyond the short term, saying prices would be too high.
With less than a week before the deadline to agree on a price for annual iron ore contracts, China is facing the choice of either buying all its ore on the spot market or accepting the same deal agreed by rivals.
A slight recovery in both steel and iron ore prices has undercut China's demands for a bigger price reduction than the 33 percent that other Asian mills agreed.
Agnelli also denied market speculation that Vale was seeking to merge with another mining company amid a flurry of consolidation in the industry.
"The markets speculate a lot; we are not interested," he said, regarding talk that Vale may try to acquire Anglo American or Xstrata after Anglo American rejected Xstrata's nil-premium merger bid.
Potential mining mergers have sparked talk that Vale may try to acquire a major industry player, though local analysts say Vale would probably target small companies as the economy slows.
The flurry of industry consolidation, including a possible joint venture between Vale rivals Rio Tinto and BHP Billiton could put takeover pressure on Vale a year and a half after its failed effort to buy Xstrata.
Vale, the world's largest iron ore miner, has for years been seeking to diversify operations by including a greater content of non-ferrous metals, a strategy that led to its 2006 purchase of Canadian nickel miner Inco.
Vale signed a preliminary accord on Thursday with state-run oil company Petrobras to buy a 25 percent stake in exploration rights for oil and gas blocks off Brazil's coast.
It said in a statement the accord laid the foundations for Vale's acquisition of exploration rights in the ES-M-466, ES-M-468 and ES-M-527 blocks off the coast of Brazil's Espirito Santo State, which Petrobras acquired via auction.
The partnership between Brazil's two biggest companies still has to be approved by authorities, Vale said.
Source: Reuters
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