Future Minerals Forum: Vale’s US$10B for Canada targets existing potential

Colin McClelland | January 11, 2024 | 7:55 am News Asia Canada Cobalt Copper Nickel 
Vale evaluates offers for $2.5 million base metals unit
Vale’s open-pit mine and concentrator at Voisey’s Bay in Labrador, Canada. (Image courtesy of Vale.)

Vale (NYSE: VALE) is spending US$10 billion ($13.3 billion) in Canada over the next decade to keep operations running in a district it values for its low-carbon production.

The funds are part of US$30 billion to be split evenly among the northern country, Vale’s homeland of Brazil and nickel hotspot Indonesia, Emily Olson, the company’s chief sustainability and corporate affairs officer, said in an interview with The Northern Miner in Riyadh on Wednesday. The funds were first announced in September.

“There’s a lot more to do with our existing operations and that’s where we would invest,” Olson said. “In terms of being greenfields, not right now.”

Vale Base Metals chairman Mark Cutifani is undertaking a unit-wide asset review that will likely find more potential at the company’s operations in Sudbury, Ont., Thompson, Man., and Voisey’s Bay and Long Harbour, N.L., Olson said. Vale also may have an announcement soon on the Bécancour nickel sulphide processing project it’s advancing to supply 25,000 tonnes of nickel a year to General Motors, she said. That deal, announced just over one year ago could be worth about $762 million per year.

“There’s just a clarity and a certainty in regulation and Canada is a mining country and with that comes a lower risk, and equally you have the wonderful benefit of renewable and clean power,” Olson said. “Canada has a great opportunity to further establish itself as a leader in our industry with community and Indigenous rights leaders.”

Olson chatted at the third annual Future Minerals Forum, a conference attended by some 15,000 delegates. Vale CEO Eduardo Bartolomeo stood nearby, but declined to speak informally to the media as part of company policy.

Vale, with a stock market value of about US$68 billion, is one of the world’s largest producers of nickel, copper and cobalt. It sold 10% of its base metals unit in July to Saudi state-owned Manara Minerals and San Francisco-based investment firm Engine No. 1 for US$3.4 billion. The deal is part of growing interest in Saudi Arabia as it swings vast oil wealth towards finding minerals to power the green energy transition.

In Indonesia, Vale’s agreement to sell 14% of its business to comply with foreign ownership rules is due to be completed within weeks. The country is preparing for an election next month as President Joko Widodo steps down after two terms. Some mining operations by other companies in the country have been criticized for environmental, social and governance (ESG) issues.

“We very much are a leader in how ESG can be done right in Indonesia,” Olson said. “It’s part of who we are there and it will evolve and grow over time, just like you’ve seen in every other country when it comes to this.”

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