Report by Global Mining Research

The three leading diversifieds have worked hard in un-diversifying themselves in recent years, becoming more and more iron ore focused, with fewer points of differentiation. David Radclyffe finds that nearly all investment ratios favour Vale (FCF yield 15%, EV/EBITDA 2.6x), then Rio Tinto and finally BHP Billiton. For as long as iron ore can hold around US$100/t, expect average cash return yields of 8-12% in 2022E. BUY Vale with a target price of $15.40.