Vale Base Metals (VBM) Ltd. has recently inked deals worth $3.4 billion with two Saudi Arabian-owned entities, marking a significant step towards the development of its base metals operations as an independent entity. The agreement will provide the necessary funding for VBM’s ambitious capital projects, focused on increasing the production of critical minerals essential for the automotive industry’s shift to electric vehicles.
Vale aims to bolster base metals production, targeting a copper output of 900,000 metric tons (up from 350,000 tons) and a nickel output exceeding 300,000 tons (up from 175,000 tons). This strategic partnership is expected to expedite VBM’s $25-$30 billion capital program over the next decade, generating numerous benefits for communities and economies across key critical mineral jurisdictions in Brazil, Canada, and Indonesia.
Eduardo Bartolomeo, Vale’s CEO, emphasized that these strategic investments are a significant milestone in accelerating the growth of their energy transition metals business platform. The company is uniquely positioned to meet the surging demand for green metals that are pivotal for the global energy transition while upholding strong social and environmental practices in sustainable mining.
Under the deals, the Kingdom’s sovereign wealth vehicle, Public Investment Fund, and Saudi Arabian Mining Co., known as Maaden, will acquire a 10% stake in the new company formed to house Vale’s base metal assets. Additionally, investment firm Engine No. 1 will purchase a three per cent stake. The total amount to be paid by both entities in these agreements is $3.4 billion.
Saudi Arabia’s global investment initiatives have been on the rise in recent years as it diversifies its wealth from oil into other sectors. Vale’s creation of a separate base metals unit, primarily composed of assets in Canada, Brazil, and Indonesia, came to fruition after careful consideration, with the unit now positioned as North America’s largest integrated nickel producer and among the largest copper businesses globally.
The company has already secured agreements to supply low-carbon and high-purity nickel to major automakers, with strategic focus on expanding mine life and advancing growth projects across its portfolio. The investments made through these deals will not only boost Vale’s base metals production but also strengthen its role in the global decarbonization and electrification megatrends.
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