Buy the Dip in VALE

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In the hard asset world, gold miners hog the spotlight.

And for good reason. Precious metal stocks can be a great way for investors to hedge against inflation and monetary chaos. And during a bull market, they can soar like few other sectors.

But the mining world is more than just gold and silver. Today we’re going to look at my favorite industrial metal miner. Long-time readers will recognize the name.

Yes, I still own gold and silver miners. But companies focused on “boring” industrial metals like iron tend to have steadier earnings. And they pay juicier dividends, too.

Back to the VALE

In June of 2025, I wrote a piece titled 8%+ Yields from Brazil’s Iron Giant.

In it, we covered Vale (NYSE: VALE), a highly profitable iron, copper, and nickel miner.

At the time, Vale was trading at $9.86. Iron ore prices were low, Brazilian stocks were in the dumps, and the company was still recovering from the 2019 Brumadinho dam disaster. It was a horrible accident where a dam holding back mine tailings broke, killing more than 270 people, and causing widespread environmental damage.

But Vale is now at the tail end of paying for that disaster. Management has spent more than $4 billion shoring up dams, adding containment structures, and instituting better processes. They took responsibility for the accident, and it cost the company dearly. But the worst is now behind them.

We got lucky with the timing of our Vale writeup, because the stock rose from $9.86 in June 2025, to a peak of $17.94 in April 2026. That’s a 81% gain, at the top. Plus about 7% in dividends.

But now, the stock has fallen back down to $13.65. And that looks like an excellent buying opportunity to me. I plan to add more next week.

Here’s why…

Irreplaceable Assets

Vale was founded in 1942 by the Brazilian government. Its purpose was simple: supply iron ore to the Allies fighting World War II.

America and its allies wanted access to Brazil’s rich and pure iron. The low-phosphorous metal was needed to make high-grade steel for artillery, guns, tanks, and armor-piercing shells.

The iron ore deposit was indeed rich and pure, but the location was remote. They needed railways and other infrastructure to transport it. So the U.S. Export-Import Bank supplied $14 million in financing.

By the end of WW2, the company had only shipped a fraction of the desired ore.

But the foundation of a giant had been laid. A unique railway, a rich mine, and valuable ore.

Today, Vale operates two major railways which are essentially impossible to replicate. Building new rail projects is extremely difficult, and this could not be repeated in the modern world.

Vale operates a vast transportation network. 610 locomotives, 35,868 rail cars, and more than 1,200 miles of railroad. It doesn’t have to pay exorbitant fees to the railway owner. It is the owner.

The company also owns massive ship terminals, piers, loaders, etc. It even owns a number of power plants to juice up its infrastructure.

And this is on top of its primary assets: rich mines, mineral concessions, and expertise.

I can’t even imagine how much it would cost to build another Vale today. An unfathomable amount of money, and at least 30 years.

That’s why I love this mining giant. It’s irreplaceable.

Long Haul Investment

I plan to own Vale for at least 10 years. Longer if things go well.

It’s an ideal dividend-reinvestment stock. I auto-reinvest the dividends back into the stock automatically using a DRIP program (all brokers offer these). This allows for steady compounding.

The next 10 years is sure to be a chaotic period. Inflation, war, and debt crises.

In such an environment, I want to own a lot of hard assets. Companies with inflation-resistant assets, strong cash flow, and preferably big dividends.

Vale fits the bill nicely. It has the potential to be the biggest miner in the world one day.

In 2025, Vale CEO Gustavo Pimenta stated that the company “has to be the biggest mining company in the world because we are sitting on the biggest mining endowment in the world.”

That’s the size of this opportunity. Here’s to hoping they hit that target.

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