Brazil's Vale reports lower 2Q profit

Brazilian mining giant Vale reported a 58.7 percent drop in second-quarter net profit, citing lower prices for iron, nickel and copper. A statement from the world's top iron ore producer said net profit totaled $2.662 billion during the period, down from $6.452 billion during the same period last year. Vale on Wednesday said the results also suffered "a large accounting non-cash balance sheet impact" arising from the devaluation of the Brazilian real, which has lost seven percent of its value against the dollar so far this year. Net operating revenue meanwhile sank to $11.893 billion, down 20.6 percent from last year. The company said the average sale price of iron ore per metric ton fell from $145.30 in the second quarter of 2011 to $103.29 in the corresponding period this year while that of pellets dipped from $206.07 to $159. The sale price of copper per metric ton meanwhile shrank from $8,871 in the second quarter of 2011 to $7,566 in the same period of 2012 while nickel went down from $25,541 to $17,761. "Vale had a robust financial performance in spite of the challenges posed by the lower price environment and operational issues in the base metals and coal businesses," the statement said. "Iron ore production and sales have recovered from last quarter's weather-related low performance," it added. The company said it sold 62,978 tons of iron ore in the second quarter of 2012, up from 62,644 tons during the same period last year. Sales of pellets totaled 12,277 tons during the second quarter of this year, compared with 10,253 tons during the same period last year.