Vale has reached a deal to divest its manganese and iron ore mines in central Brazil to Brazil-based private investment holding company J&F Investimentos, for an enterprise value of $1.2bn.

As part of the deal, J&F Mineração, controlled by J&F Investimentos, will also purchase Vale’s logistics assets in the region and absorb all employees of the assets.

Last week, Vale said it was in advanced talks with an undisclosed potential buyer to offload the companies that compose its Midwestern System.

This sale forms part of the Brazilian miner’s efforts to focus on core businesses and growth opportunities.

The Midwestern System includes Mineracao Corumbaense Reunida, Mineracao Mato Grosso, International Iron Company and Transbarge Navegacion ventures.

In 2021, the Midwestern System reported production of 2.7 million tonnes (Mt) of iron ore and 200,000t of manganese ore.

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By GlobalData

In a press statement, Vale said: “At the closing of the transaction, Vale will receive approximately $150m, in addition to transferring to the buyer the obligations related to the take-or-pay logistics contracts, subject to the consent of the applicable counterparties, and other liabilities existing in the assets of the abovementioned companies.”

The binding agreement awaits regulatory clearance, including that of the Administrative Council for Economic Defense (CADE), the National Defense Council (CDN), and the National Agency for Waterway Transportation (ANTAQ).

Separately, Vale started construction on a ‘green’ pig iron plant in Marabá, near its Carajás iron ore mine.

The new facility is expected to contribute to the decarbonisation of the steel industry.

Featuring technology developed by Vale’s wholly owned subsidiary Tecnored, the plant is expected to have an initial production capacity of 250,000tpa of pig iron and reach a peak capacity of 500,000tpa.

Estimated to cost $345m, the facility is planned to start production in 2025.

Vale CEO Eduardo Bartolomeo said: “The Tecnored project is of great importance for Vale and the region and will provide competitiveness, environmental sustainability, and development to the region.

“The implementation of Tecnored represents an important step in the transformation of mining, contributing towards an increasingly sustainable process chain.”