SAO PAULO Brazilian miner Vale SA said on Thursday it reached two separate agreements to sell a 13% stake in its base metals business for $3.4 billion, aiming to boost its copper and nickel output.
The sale is part of Vale's strategy the improve the management of nickel and copper assets, given expectations for soaring demand for the metals from the electric vehicle market.
Under the deals, a joint venture formed by Saudi Arabian Mining Co (Ma'aden) and the country's Public Investment Fund (PIF) will acquire 10% of Vale's base metal unit, while U.S. investment firm Engine No. 1 will acquire 3%.
"With our high-quality portfolio, we are uniquely positioned to meet the growing demand for green metals essential for the global energy transition," Vale's CEO Eduardo Bartolomeo said in a statement.
With its new partners, Vale aims to invest between $25-$30 billion in strategic mineral projects over the next decade, it said.
This would enable a "significant potential increase in our copper production" to about 900,000 metric tons per year, from 350,000 tons, it said. Nickel output would grow to more than 300,000 tons per year, from the current 175,000 tons.
The deal values the company's base metals unit at an enterprise value of $26 billion, it said.
Vale's core business is iron ore production and distribution, but its base metals unit also produces copper and nickel at mines in Brazil, Canada and Indonesia.
($1 = 4.7515 reais)
(Reporting by Peter Frontini; Editing by Isabel Woodford, Brendan O'Boyle and Deepa Babington)
