Brazil's Vale receives non-binding offer for minority base metals stake

Brazilian mining titan Vale is advancing the sale of a minority stake in its nickel and copper operations.

"We confirm the receipt of non-binding offers for the [acquisition of a] minority interest in our base metals unit," a company spokesperson told BNamericas, without disclosing the companies or investors behind the offers or the size of the stake.

The Financial Times reported on the plan, quoting CEO Eduardo Bartolomeo.

Last year, Vale started reorganizing its base metals operations, also evaluating a share offering. Later, the company unveiled plans to sell a 10% stake to consolidate the business and make it more attractive for investors interested in the IPO.

"In my view, it was never Vale's short-term plan to carry out the IPO of this division. Vale's priority is to scale up this division, show the results and potential first, and then move forward with the plan for a share offering," Conrado Vegner, a mining analyst at Banco Safra, told BNamericas.

Vale’s main business line is iron ore, but the company seeks to increase copper and nickel production amid expected demand growth due to the energy transition. Bartolomeo even suggested the base metals division could become bigger than the iron ore business. 

"If we think in terms of the electrification of transport taking place in the world, there is room for an expansion of these commodities. But for Vale to have this division greater than the iron ore area would require an increase in reserves and aggressive production and that would happen in a relevant way only through acquisitions of assets outside the country," said Vegner.