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2013 hasn't exactly been a banner year for shares of Vale ( VALE) either. Since the calendar flipped to January, the Brazilian mining firm has shed more than a quarter of its market cap, a downtrend that only got broken late this summer thanks in large part to strong second-quarter numbers released last week. Vale is the largest iron ore miner in the world, with more than 300 million metric tons of the metal coming from its mines annually. Vale also produces coal and metals such as nickel and copper.

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Vale's fortunes are tied in lock-step with commodity prices: when hard commodities are skyrocketing, so too are Vale's margins. But this year, softening demand for iron has sent investors fleeing from any name with excessive commodity exposure. A low cost structure should help to diffuse the risks at play here. In general, VALE's mines produce higher-quality ore, a fact that gives the firm claim to higher selling prices and better production efficiency. That helps to offset some of the costs in shipping its metals all over the world.

Ultimately, iron is an extremely cyclical business. But the good news is that warming economic engines around the world in 2013 should parlay into a cautious ramp-up in demand for iron ore. With rising analyst sentiment building in shares this week, we're betting on VALE.

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