December 8, 2017 / 4:28 PM / a month ago

UPDATE 1-Brazil's Vale says to slash debt to $10 bln by 2019

(Adds debt goal timeframe, dividend advice)

By Maytaal Angel and Eric Onstad

LONDON, Dec 8 (Reuters) - Brazilian miner Vale will likely reduce its $21 billion debt load to $10 billion by 2019, and will dedicate cash flow from then on to paying out dividends, the chief financial officer of the world’s top iron ore producer said on Friday.

“The message is very clear here, which is that beyond the achievement of the $10 billion target we’re going to distribute everything as dividends,” Luciano Siani Pires said at an investor event in London.

Vale, the world’s largest iron ore producer, has been recovering since a slump in iron ore prices and hefty outlays for the ramp-up of its S11D mine crimped its financial performance in recent years.

Chief Executive Fabio Schvartsman said Vale aimed to close a deal with an investment partner to buy a 20 to 40 percent stake in its New Caledonia nickel mine by the middle of next year.

Outgoing base metals chief Jennifer Maki said a full recovery of the nickel market was still a few years off.

Over budget and years late when it finally started up in 2010, the New Caledonia project accumulated nearly $1.3 billion in losses between 2014 and 2016, according to a June presentation to investors.

At an investor event earlier this week, Vale dialed back its nickel output forecasts for the next five years, although the world’s top producer of the metal praised its longer term prospects on a likely surge in demand for electric cars.

Vale executives on Friday also said that a $60 to $70 per tonne iron ore price was good for the industry as a whole, while forecasting a price premium of $3.5 to $4.5 for the company’s ore next year due to its higher iron content compared to peers. (Reporting by Maytaal Angel and Eric Onstad; Editing by Chizu Nomiyama and Gareth Jones)

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