Vale to Sell Some Stake In Exchange For Funds To Double Nickel Output

Brazilian miner Vale (VALE13.SA) said on Thursday it had struck two separate deals to sell a 4 percent stake in its base metals business for $300 million, aimed at boosting its copper and nickel output. The sale is part of Vale's strategy to improve the management of its nickel and copper assets, as demand for the metal is expected to soar in the electric vehicle market.

According to the agreement, the joint venture established by Saudi Arabian Mining Company (Ma'aden) (1211.SE) and the country's Public Investment Fund (PIF) will acquire a 10% stake in Vale's base metals division, while US investment company Engine No. 1 will acquire 3%.

Together with the new partners, Vale aims to invest $2.5 billion to $3 billion in strategic mineral projects over the next decade, Vale said. This would allow "a significant increase in our copper production" from 3.5 million tonnes per annum to about 9 million tonnes.

Nickel production will grow from the current 1.75 million tonnes to more than 3.5 million tonnes per year. The deal has an enterprise value of $26 billion for the company's base metals unit, the company said. While Vale's core business is iron ore production and distribution, its base metals unit also produces copper and nickel at mines in Brazil, Canada and Indonesia.