Brazil's Vale Earnings Drop 15 Percent

Brazilian mining giant Vale, the world's largest iron ore producer, reported a sharp drop in third quarter earnings Thursday despite cost-cutting, in a reflection of the global economic slowdown and Brazil's currency depreciation.

Adjusted earnings before interest, taxes, depreciation and amortization were down 15.3 percent from the second quarter at $1.875 billion, Vale said in a statement.

The overall net loss of $2.1 billion was in contrast to profits of $1.675 billion in the second quarter.

Gross revenues totaled $6.6 billion, down $467 million, due to lower prices, the mining group said.

Earnings were "supported by significant reductions in costs and expenses," Vale said.

However, the steep slump in the Brazilian currency, the real, amid recession in the world's seventh largest economy, hit Vale's results hard.

The "decrease in income was mostly driven by the effect on financial results of the depreciation of the real against the dollar of 28 per cent in the third quarter of 2015," said the company.

Vale, also a major nickel and copper producer, earlier this week reported record quarterly production of iron ore, the key ingredient in steel-making, at 88.2 million tons.

However, a slackening of demand has also kept prices low, eating into the bottom line despite major cost- cutting.

Sales to Asia represented 53.6 percent of total gross revenues in the third quarter, up from 51.1 percent, with China the main market, accounting for 38.6 percent of total gross revenues. Brazil, Japan and Germany followed.