Brazilian mining company Vale needs emergency funding, and will now take out a loan of USD 3 billion in order to strengthen liquidity and make payments on bond loans set to expire this month, writes the Wall Street Journal. According to the newspaper, the mining company did not disclose at which interest rate the loan is taken out, but informs that an additional USD 2 billion were made available.
The money will be used to pay for the expansion of projects, and Vale is drawing on its credit facilities because it has proven impossible to generate cash from selling assets. With the price plunge in commodities, the banks have grown less interested in deals with the industry. This has caused problems for many mining companies, which are now struggling to pay for the expansion of mines that were implemented when the markets looked very different, writes the Wall Street Journal.