International and Sudbury nickel miner Vale is ready to sell off 10 per cent of its base metals division to Saudi Arabia, according to reports in the business media.
The Wall Street Journal, Reuters and BNN Bloomberg have reported that the Saudi Arabia Public Investment Fund (PIF) is regarded as the leading bidder to acquire a stake in Vale SA’s multibillion-dollar nickel and copper operations.
Vale Base Metals is headquartered in Toronto, and is one of the world's largest producers of responsibly sourced nickel, copper, cobalt and platinum group metals, said the company website.
The website further stated that "in Canada, the U.K., Brazil, Japan and Indonesia we produce critical minerals that power electric vehicles, create renewable energy solutions and help develop life-saving medical equipment."
While there is no formal news of the pending deal from the PIF, the Saudi PIF webpage does show the fund has an interest in investments in Brazil.
The Saudi Arabian investment firm, in a joint venture with state miner Maaden, is reported to be looking to acquire a stake worth around $2.5 billion.
Advanced discussions are taking place between the Brazilian miner’s and the Saudi joint venture, said another news service, Economy Middle East (EME).
"The Public Investment Fund (PIF) is currently leading in the bidding war for roughly 10 per cent of Vale’s nickel and copper operations.
The Saudi Arabian investment firm, in a joint venture with state miner Maaden, is looking to acquire a stake worth around $2.5 billion. Advanced discussions are taking place between the Brazilian miner’s and the Saudi joint venture," said EME.
Vale had issued a statement late last year revealing their intentions to sell stakes. Their bid is being weighted against offers made by the Japanese trading house Mitsui & Co and the Qatar Investment Authority, said the EME website.
On June 20, BNN Bloomberg reported the PIF was "in advanced discussions" with Vale for a 10 per cent holding in the mining company's base metals division valued at roughly $2.5 billion, according to confidential sources.
The same sources told BNN Bloomberg that the wealth fund was poised to beat out rival bidders including Japanese trading house Mitsui & Co. and the Qatar Investment Authority. It was also reported that it could take several weeks to hash out the details of a formal agreement.
For its part Vale issued a statement on June 20 to clarify that it was "seeking a partnership," as follows: "Regarding the news published today, Vale clarifies that it is actively seeking a partnership for its Metals for Energy Transition business, as part of its strategy to attract investment and accelerate business growth.
Vale has been updating the market on this matter on a regular basis, however, at this stage, it cannot yet confirm the value of a possible investment or the parties involved", said the company.
"We will keep the market informed as the process progresses."
The company's second quarter production report was released a week ago.
Vale reported that production numbers were up for both copper and nickel "Copper production increased 41 per cent y/y (year over year) and 18 per cent q/q (quarter over quarter) largely attributed to the successful ramping up of Salobo III plant and the improved performance of the Sossego operation. Copper sales increased 43 per cent y/y and 18 per cent q/q as result of higher production volumes," said the company report.
"Nickel production increased eight per cent (year over year) largely attributed to better operational performance in Sudbury and Indonesia. Q/q, production was impacted by planned maintenance shutdowns, particularly at the Long Harbour and Clydach refineries.
Nickel sales increased 3 per cent y/y driven by improved production, remaining relatively stable q/q due to inventory buildup in Q1," the company report continued.
Len Gillis covers mining and health care for Sudbury.com.