NEW YORK (TheStreet) -- Shares of Vale (VALE) hit five-year lows on Tuesday, as iron ore prices continue to weigh on the company's stock price. TheStreet TV's Brittany Umar talked with CFO Luciano Siani at the floor of the New York Stock Exchange about iron ore prices and the company's future.
Vale is adapting to falling prices by reducing costs and becoming more competitive, Siani said. Vale already has a very low cost structure for producing iron ore, he added, which gives the company a competitive edge over other producers with higher costs that can't afford to wait out the falling prices.
Vale is thus able to take market share, he argued. The company does not plan to cut production now, due partly to its low cost structure.
The company's previous guidance for its capital budget stood at $12.5 billion. That figure was recently reduced -- a good thing, according to Siani. Now Vale will be able to hit its investment targets, but with the use of less capital.
As for cost cutting, the company plans to spin off several divestitures in order to focus on core operations and to boost cash flows. Management plans to look at all possibilities when it comes to creating shareholder value, he said.
And Siani said he believes it's a when, not if, scenario for iron ore prices to move back higher.
-- Written by Bret Kenwell