The deals take the enterprise value of Vale’s energy transition metals business at $26bn. Credit: noranissaanditha from Pixabay.

Brazilian miner Vale has signed two separate agreements to divest a 13% stake in its base metals business, Vale Base Metals (VBM), for a total consideration of $3.4bn.

The sale is part of Vale’s effort to boost its copper and nickel output to meet the surging demand for the metals from the electric vehicle (EV) market, reported Reuters.

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Manara Minerals, a joint venture between Ma’aden and Saudi Arabia’s Public Investment Fund, will acquire a 10% stake in Vale’s base metal unit while US investment firm Engine No. 1 will acquire a 3% interest.

The deals take the enterprise value of Vale’s energy transition metals business to $26bn.

Subject to precedent conditions, including the approval of the relevant regulatory authorities, the transactions are planned for completion by Q1 2024.

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In a press statement, Vale said: “This strategic partnership will fast-track VBM’s expected $25bn-$30bn capital programme over the next decade and help drive a significant potential increase in VBM’s production from about 350 kilotonnes per annum (ktpa) to 900ktpa in copper and from roughly 175ktpa to more than 300ktpa in nickel.”

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Manara Minerals executive director and Ma’aden CEO Robert Wilt said the investment into VBM marks the company’s first major investment into the global mining sector.

In a separate announcement, Vale has registered a net income from continuing operations attributable to shareholders of $892m in the second (Q2) of 2022, a drop by 78.2% from $4.09bn in the same period a year ago, due to drop in prices.

Net operating revenues for the quarter declined 13.3% to $9.6bn from $11.1bn during the same quarter of 2022.

Proforma adjusted EBITDA from continuing operations dropped to $4.14bn from $5.53bn.