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.

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.

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.