PIF and Mitsui consider Vale base metals unit stake

03 November 2022
Other firms considering a stake in Vale’s base metals business include Ontario Teachers’ Pension Plan Board and Mubadala Investment

Saudi Arabia’s Public Investment Fund (PIF) and Japanese firm Mitsui & Co. are looking to acquire a minority stake in Brazilian firm Vale’s nickel and copper operations, reported Bloomberg News, citing sources familiar with the issue.

Other firms considering a stake in Vale’s base metals business include Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan Board, Mubadala Investment Company and Qatar Investment Authority.

Vale is seeking initial bids for the stake in the coming weeks and expects to rake in over $2bn through the potential sale, according to Bloomberg.

The company has also approached other potential bidders, including Singapore sovereign wealth fund GIC and BlackRock, to gauge their interest.

A potential deal could value Vale’s unit at $20-25bn, the sources said.

Vale plans to divest at least a 10 per cent stake in the business. However, the stake for sale could be increased at the right price, the sources added.

Deliberations are under way between Vale and potential bidders.

In a separate development, Vale signed agreements with local authorities and clients to develop ‘mega hubs’ to produce low-carbon products for the steelmaking industries in the UAE, Saudi Arabia and Oman.

The proposed hubs will be equipped to produce hot briquetted iron (HBI) and steel products with significant CO2 emissions reduction.

Vale reached a memorandum of understanding (MOU) with Saudi Arabia’s National Industrial Development Centre (NIDC) to assess the feasibility of developing a mega hub at Ras al-Khair Industrial City.

An MoU has also been signed between Vale and Emirates Steel Arkan (ESA) for the mega hub development study at Khalifa Economic Zones Abu Dhabi (Kezad).

Vale and Oman’s Ministry of Commerce, Industry & Investment Promotion also signed a cooperation memorandum to jointly study a mega hub development at Duqm's Special Economic Zone.

Vale CEO Eduardo Bartolomeo said: “With this initiative, Vale will guarantee the availability of high-grade agglomerated products and foster the expansion of the low CO2 emission steel industry.”

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