A report on Bloomberg quoted Vale’s chief financial officer Fabio Barbosa as saying negotiations between the two mining powerhouses to create the world’s largest mining company were “dead”

The news comes after the Brazilian media speculated on a revival of takeover talks, following the comments of Vale chief executive Roger Agnelli earlier this week that discussions could resume “if Xstrata wants”.

Talks over a potential deal were scrapped late last month on reports that an agreement could not be reached between Vale and Xstrata’s major shareholder Glencore – which owns a 35% stake – over marketing rights for Xstrata’s copper, nickel, cobalt and coal production.

Analysts believe Vale is already looking for other targets and may enter takeover negotiations shortly.

Last month, Barbosa said Vale planned to expand and diversify its operations overseas.

“We want to expand our investor base,” he said at a seminar on Brazil’s economic outlook for 2008 last month.

“To diversify our investor base, expand our profile into other regions where there is economic growth and…Vale could have interests.”