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June 14, 2018

Vale signs $690m deals to sell cobalt from Voisey’s Bay mine

Brazilian metals and mining firm Vale has reached agreements to sell future cobalt production from its Voisey’s Bay mine, located in the Canadian province of Newfoundland and Labrador, to Wheaton Precious Metals and Cobalt 27 Capital for around $690m.

Brazilian metals and mining firm Vale has reached agreements to sell future Cobalt production from its Voisey’s Bay mine, located in the Canadian province of Newfoundland and Labrador, to Wheaton Precious Metals and Cobalt 27 Capital for around $690m.

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The deals will give the buyers access to 75% Cobalt stream from the Voisey’s Bay nickel mine, where Cobalt is mined as a by-product. Cobalt is used as an ingredient in batteries that power electric vehicles.

Vale will use the proceeds from the deals to fund the Voisey’s Bay underground mine expansion project (VBME).

“We welcomed the opportunity to invest in another low-cost, long-life asset with a partner of Vale ‘s calibre.”

The $1.7bn expansion project is expected to increase the life of the mine to 2034.

Pursuant to the terms of the deal, Wheaton will receive 42.4% of the future Cobalt production for an upfront payment of $390m, while Cobalt 27 will be entitled to 32.6% for $300m, to be delivered from 1 January 2021.

Vale Base Metals executive officer Eduardo Bartolomeo said: “By unlocking the value of the Cobalt by-product at Voisey’s Bay through this streaming deal, Vale has found a way to resume substantive work on the underground project in Voisey’s Bay and support the market’s increasing demand for nickel, copper and Cobalt , as well as uphold its commitment to the government, our Indigenous stakeholders and the people of Newfoundland and Labrador, Canada.”

The deals will also see Vale receiving further payments of 20%, on average, of Cobalt prices for each pound of finished Cobalt delivered to the companies.

Wheaton Precious Metals president and CEO Randy Smallwood said: “While our focus has been, and always will be on precious metal streaming, we welcomed the opportunity to invest in another low-cost, long-life asset with a partner of Vale ‘s calibre.”

Once Wheaton and Cobalt 27 have received 31 million pounds and 23.8 million pounds of Cobalt respectively, they will be entitled to 21.2% and 16.3% respectively for the life of the mine.

The Voisey’s Bay mine is estimated to contain total mineral reserves of 32.4 million tonnes with a nickel grade of 2.13% and a Cobalt grade of 0.13%.

Though the approval for the VBME expansion project was obtained in July 2015, Vale did not proceed due to ‘difficult’ market conditions.

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Free Report
img

2022: So far In Venture Capital

Global investment in 2022 has been majorly dominated by North America, Europe, and Asia Pacific, whereas the Middle East, and South and Central America have recorded low investments comparatively. In light of this, Europe and North America have been identified as the major destinations for Private Equity and Venture Capital (PE/VC) investments.   GlobalData’s whitepaper analyzes which sectors PE/VC firms have been investing in, looking at Technology, Media, and Telecom, with these sectors recording $356 billion and a deal volume of over 10,000 deals in 2022. Healthcare, Financial Services, Business & Consumer Services, and Construction sectors have also seen high investment activity by PE/VC firms, recording a deal value of over $70 billion each.   But what can this mean for you?   Understand how the Deals Database on GlobalData Explorer can be leveraged to:  
  • Track the Aggregate Investment Volumes in PE/VC-Stage firms across geographies and sectors, in addition to viewing the specific deals that drove these volumes
  • Identify the top investors already active in any sector-Geography combinations
  • Assess the Performance of Financial and Legal Advisors, supporting the Dealmaking in any segment of choice (Customizable League tables)
  • Understand what is driving the PE/VC fundraising (Deal Rationale)
  Consult our full report here and optimize your business strategy.
by GlobalData
Enter your details here to receive your free Report.

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