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Saudi Arabian venture takes stake in Vale’s base metal business

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Brazilian mining giant sells 13% stake of nickel-copper business in US$3.4Bn deal.

Vale has reached two separate agreements to divest a combined 13% stake of its base metals business. The first deal is with Manara Minerals, a new joint venture established to invest in mining assets globally between Saudi Arabian Mining Company (Ma’aden) and the country’s Public Investment Fund (PIF). At the same time, US investment firm Engine No. 1 will also take a 3% equity interest. Reports suggest the cash deal is expected to close by Q1 2024 and values Vale’s base metals unit at an enterprise value of US$26Bn.

Last year, Vale placed its nickel and copper business within a new legal structure named ‘Vale Base Metals’, which contains its nickel assets in Canada and Indonesia as well as Brazil’s Onça Puma ferronickel operation and Salobo copper project. The company said it would also invest up to US$30Bn on new projects in Brazil, Canada, and Indonesia to boost output over the coming years. Nickel production is expected to reach 230-245kt in the mid-term, which is anticipated to rise to over 300ktpy from 2030. Copper output is also set to triple from current levels to approximately 900ktpy.

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Vale has been quick to conclude its business, taking advantage of soaring demand for critical metals as the push to decarbonise global economies intensifies. For Saudi Arabian interests, the deal represents the country’s first major foray into the global mining sector and follows the UAE government’s recent US$1.9Bn investment to develop mines in the Democratic Republic of Congo (DRC). These deals are further evidence that the Gulf states are increasingly eager to take advantage of their abundant mineral resources and oil wealth to engage in the energy transition from a critical minerals and fossil fuel diversification perspective.

 

Source: project bljue

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