Reuters reported that Brazilian miner Vale will stick to its target of producing 1 million tonnes of copper a year by 2015 after pulling out of a bid for South Africa's Metorex and may pursue other buyouts.

Vale said that it would not raise its USD 1.1 billion offer for copper and cobalt producer Metorex after China's Jinchuan Group trumped it with a bid of USD 1.32 billion.

But a source close to the company, speaking on the condition of anonymity as he was not authorized to discuss Vale affairs with the press, said it would stick to its goal of ramping up copper output which would help Vale in its goal of diversifying revenues away from its iron ore mining mainstay.

The source said that “We have to reach 1 million tonnes of copper in four years. Metorex was going to bring this about sooner, but we continue to seek diversification in our revenues. You'll have other options but they will be more expensive. The choice of Metorex, although in terms of size isn't that big was going to help Vale reach the target and it was being negotiated in the market at a very attractive.”

Analyst Mr Pedro Galdi from the SLW brokerage in Sao Paulo said that ongoing economic problems in Europe and the United States meant other similar buyout opportunities could easily arise for Vale with its large supply of ready cash.

As of March the company had BRR 19.1 billion in cash versus BRR 3.5 billion in short term debts and BRR 37.4 billion in long term debt leaving it with net debt of around BRR 22 billion. Rumors have been circulating that Vale would make another attempt to buy Brazilian copper producer Paranapanema after its previous attempt fell through in 2010.

Mr Galdi and the other source said this would make little sense for the company at this time and that Paranapanema would likely become a more attractive target in the future once it had prospected some of its more than 100 mining concessions.

(Sourced from Reuters)