Vale Divests 13% Interest In Base Metals Business For $3.4B

Yesterday, Vale SA VALE disclosed two separate deals to sell a 13% stake in its base metals business for a total consideration of $3.4 billion.

The company inked its first binding agreement with Manara Minerals, a joint venture between Ma'aden and Saudi Arabia's Public Investment Fund.

As per this, Manara Minerals will make an investment in Vale Base Metals Limited (VBM) at an implied enterprise value of $26 billion. 

Vale's second binding agreement was with the investment firm Engine No. 1, as per which, Engine No. 1 will invest in VBM under the same economic terms. 

These strategic collaborations will accelerate VBM's expected capital program of $25 billion-$30 billion over the next decade and will boost production to 900kt/year from about 350kt/year in copper and to more than 300kt/year from roughly 175kt/year in nickel. 

The transaction is expected to close by Q1 FY24, subject to the approval of the relevant regulatory authorities.  

"We see these strategic investments as a major milestone in our path to accelerate accretive growth in our Energy Transition Metals business platform, creating significant long-term value to all of 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 strong social and environmental practices and sustainable mining," said Eduardo Bartolomeo, Vale's CEO.

Also Read: Analyst Foresees Potential IPO For Vale's Base Metals Business, Upgrades Stock

Price Action: VALE shares are trading higher by 2.97% at $14.35 on the last check Friday.