Vale S.A. (NYSE:VALE) enters into a contract with a bank syndicate, Cliffs Natural Resources Inc (NYSE:CLF)
Vale S.A. (NYSE:VALE) has announced that they have entered into a contract with a bank syndicate comprising of 16 global commercial banks for a five year revolving credit facility for an amount of $2 billion. The company along with its other wholly owned subsidiaries can utilize the credit facility and draw funds from it to meet their short term liquidity. The company has entered into such a contract so that the company’s cash management works efficiently. The company has a now indebted itself to such credit facilities amounting to $5 billion; where $3 billion is due in 2016.
The company’s high value project, S11D to iron ore industry has obtained the installation environmental license. The project gives the best quality iron ore with the lowest possible costs. This project is the largest project owned by the company in its history which will help it to grow and achieve milestones. The project has an annual capacity of 90 million metric ton of iron ore along with proved and proved reserves of 4,240 billion metric ton with an average content of 66.7% ferrous.
The company has so far incurred US $2.736 billion with further investments to be made until 2018. The estimated cost of the project is ascertained at $19.671 billion. The further capital expenditure includes costs related to investments in logistics, rolling stock amounting to $10.363 billion and $ 1.036 billion respectively and transferring $183 million from CLN 150 to CLN S11D.The projects capacity can be increased to 230 million metric ton per year. The projects also involves construction of new railways sections with dual tracks, rail terminals and rail spurs along with other on shore and off-shore investments.
This project is likely to create new values for the company through the future development of lower investment costs brownfield projects yielding quality products at lowest possible cost, which will help the company to lead the iron ore industry globally.
Cliffs Natural Resources Inc (NYSE:CLF) is an international company engaged in mining and natural resources. The Company is the process of producing iron ore producer metallurgical coal. The company’s Wabush Scully mine recently resumed its operations after a forest fire in the region.