Due to increase in prices of steel making ingredient and also their increase in consumption in China, the world’s largest iron-ore producer Vale SA (ADR) (NYSE:VALE) increase its dividend plans by 13 percent this year.
Vale said in a statement yesterday that in second installment of the dividend, Holders of preferred and common stock will receive about 43.7 cents per share which equals the amounts to $2.25 billion. This will increases the total dividend to shareholders this year by $4.5 billion as compared to a $4 billion target already set.
Company which cuts its cost and remains focused on its most profitable projects that ultimately benefit shareholders that make it the third-largest mining company in the world. Last year, The Company paid $6 billion in dividends. The main reasons for this rise in dividends are due to the increase in iron ore prices and increase in demand for these assets in China. In a note Leonardo Correa and Luiz Fornari said that if this trend continues it will lead the Vale SA (ADR) (NYSE:VALE) to the top dividend payer in its industry.
According to The Steel Index Ltd. Australia Out of 100% with 62 percent Iron ore content delivered to the China which is 3.7 percent more than last year and an average of $135.40 per ton in 2013, china is the world largest consumer of metal and for this reason it raised its 2014 price estimates to $119 a metric ton of raw material.
Vale’s board will discuss this dividend proposal during a meeting on Oct. 17 and if this proposal is approved $2.25 billion payment will be made on Oct. 31. It paid a first $2.25 billion installment of this year’s dividend on April 30.