Brazilian iron ore producer Vale is looking to spin-off its base metal business, which could be worth up to $14bn.

The company said that slumping iron ore prices have prompted it to concentrate on its core business.

Vale could sell a 30% to 40% stake in the metal unit worth around $35bn, and may list it in Toronto and London, sources told Financial Times.

Vale chief executive Murilo Ferreira told Financial Times: "We believe that there is hidden value in the base metals division that needs to be unlocked.

"We believe that there is hidden value in the base metals division that needs to be unlocked."

"The IPO was still just a possibility and had not yet been taken to the board of directors.

"We will not just sell at any price."

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During the third quarter, the company’s iron ore business contributed 62% of its gross revenue.

Vale has been increasing production of iron ore at a record pace while the demand from China has slowed.

China is claimed to be largest consumer of metals and has pushed down prices of the steel-making material to their lowest in the last five year.

As Vale looks to avoid a cashflow squeeze in the midst of halved iron ore prices, the company plans to cut its investment budget to $10.2bn for 2015, from the previously announced $12.5bn.

In the same year, the company hopes to produce 340 million tonnes of iron ore.

Vale chief financial officer Luciano Siani told Bloomberg TV that the company is assessing funding options for projects.