Brazilian miner Vale will recommend to its board that no dividend is paid to shareholders this year because of the slump in commodity prices, the company said on Thursday.
The world's largest producer of iron ore has been hit hard by a dramatic fall in the price of the steelmaking raw material, with analysts predicting the company will be cash flow negative in 2016 unless it manages to curb costs and sell assets.
The news comes one day after Fortescue Metals Group, the world's fourth-largest exporter, said it had raised its latest quarterly output by 2 per cent.
Fortescue also said that it could weather far lower iron ore prices than previously touted as it cuts costs faster than planned.
The company said it would push on with its drive to slash costs after hitting a cost-reduction target six months early due to improved efficiency at its operations, lower debt and falling prices for oil and freight.
"If you stack all those together ... that results in a substantial reduction in our cash breakeven below our last guidance at $US36 a tonne," Chief Executive Nev Power said after the firm released its quarterly production report. He was referring to the ore price at which the company would neither make nor lose cash. That compares with prices near $US41 a tonne.
Source : AFR