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Both Brazil's Vale and Switzerland's Xstrata (XTA.L) expressed confidence that demand from China would remain strong, despite a global economic downturn that is trimming its sprouting.

"From our point of contemplate, while this is a fallow seasonal period of the year at once. China remains a very strong source of product for commodities," Xstrata Chief Executive Mick Davis told Reuters.

Vale (VALE5.SA)(RIO.N), the world's biggest iron ore producer and one of the utmost degree three miners, posted gin profit of $5.009 billion in the advance quarter, up 22.3 percent from a year ago, helped by a hefty estimation hike for its iron ore.

Many analysts did not contract forecasts for Vale's second-quarter earnings in the manner that banks are restricted from talking about the compressed due to its $12.17 billion global quota offering last month.

Vale said that despite sharp recent declines in the share prices of metal and mining firms sparked by the U.S. credit crunch, demand for its commodities remained strong. Its iron ore and pellet lengthening rose 7.9 percent in the quarter from a year earlier to a record 78.858 a thousand thousand tonnes.

"In spite of the current risks, we believe that the fundamentals of the mineral and metals markets have not changed, remaining very robust," it said in its profits. statement.

Vale also said on Wednesday that earnings before interest, taxes, depreciation and amortization (EBITDA) — a elucidation measure of cash flow — rose 23 percent to $6.218 billion with less than U.S. Generally Accepted Accounting Principles (US GAAP).

Vale this year tried but failed to acquire Xstrata in a deal some analysts valued as high as $90 billion.

Xstrata, which on Wednesday unveiled a $10 billion takeover bid against the world's third-biggest platinum producer Lonmin (LMI.L), posted a 2 percent rise in first-half attributable net profit of $2.83 billion, higher than a average provide against of 15 analysts polled by the firm of $2.65 billion.

Xstrata, the fifth-biggest mining group by mart value, saw record output in many goods such as coal, ferrochrome and classic nickel, but results were trimmed by falls in nickel and zinc prices of 39 percent and 36 percent particularly.

Analysts were pleased that Xstrata managed to keep a lid on costs, which rose 9 percent after require to be paid savings of $166 million.

"Another sector beating performance and in line with our view that the market fears of cost expansion killing margins are overdone this reporting season," said analyst Michael Rawlinson at Liberum Capital in London.

A ramp-up in production of copper and coal in the forward half plus strong commodity prices was expected to persuade to a buoyant side with six months of the year for the Swiss fixed.

The social meeting had recently agreed to contract deals in coal with price hikes of up to 277 percent, but they would for the greatest part flow through to income in the advance half. Xstrata's operating profit in coal was due to double in the second half compared to the first, Chief Executive Mick Davis said.

In February, Vale signed an agreement with China's largest steel writer Baosteel (600019.SS) to heave its term price for ore fines by 65 to 71 percent. Reflecting that — and a sharp destruction in global nickel prices — the apportioned lot of its revenue from non-ferrous minerals fell to 32.8 percent in the period from 52.3 percent a year earlier.

Underling the importance of its Asian customers, Vale said this week it ordered a twelve of the largest class of ore carriers from a Chinese shipbuilder for $1.6 billion, aiming to boost business with the region.

Vale's shares gained 1.86 percent in local trading on Wednesday before the results were announced, while the broader market rose 1.9 percent. On the New York Stock Exchange, Vale rose 52 cents, or 2 percent, to $26.68.

Shares in Xstrata closed down 1.03 percent at 32.21 pounds.

(Writing by Stuart Grudgings; editing by Carol Bishopric)