When Brazilian mining giant Vale listed on the Paris Bourse in July, CEO Roger Agnelli re-iterated his ambition for the company to become the largest miner in the world. That might look gutsy for a firm that emerged from state-ownership as recently as 1997, is head-quartered in a highly bureaucratic country, and still has an archaic shareholding structure. It’s a measure of success that despite such handicaps Vale’s surprises are usually to the upside.

Vale has enjoyed excellent stewardship under Roger Agnelli, CEO since 2001. But it was only with the $18.9 billion acquisition of Canada’s second largest mining company, Inco, in October 2006 that the firm became a global blue chip. Despite fears that Vale might fluff the huge deal – with concerns ranging from cost synergies through to worker relations -- the acquisition is widely acknowledged a great success and generated investor support for further jumbo acquisitions.

Moreover, Vale’s experience in tricky Brazil gives it a crucial head start in working in the tough countries to which mining is increasingly gravitating. Vale’s experience of coal mining in Mozambique, where western countries enter with trepidation, points the way to successful partnerships in such countries.

It’s not all smooth sailing. The clunky shareholder structure – the government holds golden shares – chafes and is seen as a force for conservatism, although this may not be an altogether bad thing in such a volatile industry. Furthermore, since the Inco acquisition, Vale has proved less adept at executing or even explaining its acquisition strategy and was unable to seal a deal to buy Anglo-Swiss Xstrata. Finally, the commodities downturn is cooling enthusiasm for acquisitions across the sector. But the bleak short-term outlook should not disguise Vale’s strong position for long-term success.

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