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Vale looks for partner in base metal mining spinoff company

Brazilian miner intends to solidify stake in North American electric vehicle sector
The Voisey's Bay nickel, cobalt and copper operation in Labrador (Vale photo)

Vale Canada’s parent company, Vale SA , is looking to create a spinoff company for its global base metals assets.

Reuters, Bloomberg and other news media reported that the Brazilian iron ore miner’s CFO Gustava Pimenta said the company is in advanced talks with potential partners and hopes to have a deal done and made public sometime in the first half of 2023.

At an investors meeting at the New York Stock Exchange on Dec. 7, Pimenta said Vale is only looking to sell 10 per cent of its base metals business to a minority partner so as to maintain a majority stake in this proposed joint venture. 

Vale S.A.'s existing base metals business is headquartered in Toronto with nickel, copper and cobalt producing operations in Sudbury; Thompson, Man., and Voisey’s Bay, Labrador, as well as Brazil and Indonesia. 

Under the banner of Vale Base Metals, the nickel and copper operations will have independent governance and have a board constituted of experts and leaders in deep underground mining and in the electric vehicle industry.

Reports said there's a possibility Canada could be the company's new global headquarters to manage its nickel and copper operations.

With critical minerals like nickel, copper and lithium coming rapidly into vogue by car makers, Vale wants to stake out a North American position in the global march toward vehicle electrification by doing agreements directly with the car companies. 

The mining company has already signed a nickel sulfate supply agreement with General Motors to provide the semi-processed material needed in the manufacturing of batteries used for electric vehicle.

Vale did not divulge any details on the approximately value of a 10 per cent stake but the company said more information will be available during the first quarter of 2023.

Pimenta told reporters that Vale wants a minority partner with expertise.

“We will change the way we manage base metals. We are looking to bring people with the capability to advise the board on investment decisions," Pimenta is quoted by Reuters.