Talk to Fabio Barbosa about the looming recession in western economies and you get a smile and a shrug in reply. While most western businessmen are tearing their hair out as demand evaporates and credit dries up, the Brazilian is in a business enjoying a purple patch.

Barbosa is finance director of Vale, the Brazilian mining group that is one of the world’s biggest natural-resources companies. Although less well known than its London-listed rivals BHP and Rio Tinto, Vale is a genuine giant, producing about a third of the world’s seaborne iron-ore, with big interests in copper, nickel, bauxite and other minerals. It is also a force in capital markets, last year becoming the most traded of all foreign stocks in New York, ahead of BP and Nokia.

Vale and its peers are reaping record profits, thanks to booming demand in China, India and other emerging economies. This year the Chinese agreed to a one-off jump of 71% in the price of Vale’s iron ore, its main product and the key raw material for steel making. Iron ore, which a decade ago was as cheap as dirt, is now hot property. Vale’s stock-market value has been in step, growing from about $10 billion (£5 billion) in 2001 to $162 billion.

These kind of price rises allow Barbosa, who spoke to The Sunday Times before Vale recently announced plans to raise $15 billion through a share issue, a relaxed view of the gloom hanging over western economies.

“In New York and London you get the impression that the world is slowing down, but if you go to China, nothing is stopping. China is going to urbanise 300m people over the next 15 years. That’s the whole population of Europe — think about the kind of infrastructure investment needed to cope with that.”

Vale (formerly CVRD, or Companhia Vale do Rio Doce) was set up in 1942 and privatised by the Brazilian government in 1997. It is a national icon. It is Brazil’s second-biggest enterprise behind Petrobras, the oil group, and was the country’s first to achieve an investment-grade credit rating. More than half its equity is still controlled by Brazilian investors.

Barbosa joined the group in 2001 as part of a new team led by chief executive Roger Agnelli (no relation to the Italian family behind Fiat).

It put together a plan to spend $7.2 billion to boost production, based on a conviction that China was about to change the world.

Not everyone shared that view, however.

“I remember meeting investors in London and America and they thought we were very aggressive and were about to flood the market with iron ore. They thought China was a bubble. But we had an office there for decades and were convinced that what we were seeing was nothing short of a transformation.”

Bankers in the sector now credit the Vale team as the first among the big miners to spot the Asian boom. Barbosa does not want to boast too much. “I wouldn’t comment on our competitors’ stance, but the fact is we moved faster,” said Barbosa.

Vale was hampered in its expansion drive by its lack of an investment-grade credit rating — a prerequisite for an American or European group with such a large investment programme.

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