The transaction valued the mining company’s metals division at US$ 26.0 billion
On Thursday (27th), Vale (VALE3) announced that it has signed a binding agreement with Manara Minerals and the American asset manager Engine No. 1 to sell a 13% stake in its basic metals unit (VBM) for the amount of US$ 3.4 billion. The full amount will be paid upfront upon completion of the transaction, subject to customary adjustments. Manara Minerals will hold 10% of Vale’s basic metals unit, while Engine No. 1 will have a 3% stake, as reported by the mining company.
Manara Minerals is a joint venture between the mining company Ma’aden and the sovereign wealth fund of Saudi Arabia, PIF. This marks Saudi Arabia’s first investment in the mining sector and the largest investment ever made in Brazil. The operation was announced just before the arrival of a Saudi Arabian delegation to Brazil, comprising over 90 members, with the aim of strengthening trade relations between the two countries.
With this transaction, the Brazilian basic metals division has been valued at US$ 26.0 billion. According to Vale’s statement, the total value of the company “demonstrates the unique endowment of Vale’s Metals for Energy Transition business, one of the largest holders of reserves and resources in critical mineral jurisdictions such as Brazil, Canada, and Indonesia.”
The strategic partnership is expected to accelerate the growth of VBM, supporting the global energy transition. Last year, Vale hired consultants to evaluate options for the business amid increasing demand for metals such as copper and nickel, which are essential for the global shift towards cleaner energy sources.
The company’s expectation is that VBM will invest between US$ 25 billion to US$ 30 billion over the next decade in strategic mineral projects. With these investments, the plan is to increase copper production from around 350,000 tons/year to 900,000 tons/year and nickel production from about 175,000 tons/year to over 300,000 tons/year.
Vale’s CEO, Eduardo Bartolomeo, stated, “We consider these strategic investments as an important milestone in our journey to accelerate the growth of our Metals for Energy Transition business platform, creating significant long-term value for all our stakeholders. With our high-quality portfolio, we are uniquely positioned to meet the growing demand for green metals essential for the global energy transition while remaining committed to robust socio-environmental practices and sustainable mining.”
The transaction is expected to close in the first quarter of 2024, subject to relevant regulatory approvals.
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