Vale secures strategic investments for energy transition metals business

Vale, a global leader in the metals industry, has entered into a binding agreement with Manara Minerals, a joint venture between Ma’aden and Saudi Arabia’s Public Investment Fund. Simultaneously, investment firm Engine No. 1 has agreed to invest under identical terms in Vale Base Metals Limited (VBM), the holding entity for Vale’s energy transition metals business. Both these deals value Vale Base Metals at an implied enterprise value of $26 billion, with a total investment sum of $3.4 billion for a 13% equity interest.

These strategic partnerships will expedite Vale Base Metals’ projected US$ 25-30 billion capital program over the forthcoming decade. It will foster a substantial prospective increase in Vale Base Metals’ production, with projections of 900kt/year from the current 350kt/year in copper and over 300kt/year up from 175kt/year in nickel. The program promises to generate jobs, economic growth, and numerous opportunities for suppliers across key critical mineral jurisdictions in Brazil, Canada, and Indonesia where Vale Base Metals operates.

Manara Minerals and Engine No. 1 will pay the total consideration of $3.4 billion in cash to Vale Base Metals at the deal’s closing, subject to standard adjustments. Post-closing, Manara Minerals will own 10% of Vale Base Metals, while Engine No. 1 will hold a 3% stake. The completion of these transactions is expected by 1Q24, contingent upon various conditions precedent, including the approval of the relevant regulatory authorities.

Eduardo Bartolomeo, Vale’s CEO, expressed his excitement about the investments, saying, “We see these strategic investments as a major milestone in our path to accelerate accretive growth in our Energy Transition Metals business platform, creating significant long-term value to all of our stakeholders.”

Robert Wilt, Executive Director of Manara Minerals and CEO of Ma’aden, viewed this as Manara Minerals’ first major investment into the global mining sector and expressed confidence in Vale’s strategic minerals business.

Chris James, Founder of Engine No. 1, and Erik Belz, Engine No. 1’s head of private capital, voiced their pride in supporting Vale Base Metals and their anticipation for the growth of this critical platform.

In the past 18 months, Vale has strategically positioned its energy transition metals business as a critical mineral supplier of choice, which includes the creation of Vale Base Metals to drive operational efficiency. With agreements to supply low carbon and high purity nickel to major automakers, Vale Base Metals is strategically focused on extending mine life and developing growth projects across the portfolio.