It is reported that Cia Vale do Rio Doce said that a deal to acquire Xstrata Plc to become the world's biggest mining company is dead.'

The report quoted Mr Fabio Barbosa CFO of Vale as saying that “"The operation is dead. The financial support is over, it made no sense keeping it. The Xstrata acquisition is over, it is dead. We do not have the financing.”

Vale also provided a copy of a thank you letter it sent to the financial institutions involved Santander, HSBC, Calyon, Citibank, BNP Paribas, RBS, Credit Suisse and Lehman Brothers. It said the deadline for Vale to use the credit expired on March 31st 2008. The letter said that “Vale is really confident that we will have other opportunities to work together in the near future."

A Vale spokesman said that "Now we're after new things organic growth and opportunities that may arise.”