Vale today signed a binding agreement with Manara Minerals, a joint venture  between  Ma’aden  and  Saudi  Arabia’s  Public  Investment  Fund,  under  which  Manara Minerals  will  invest  in  Vale  Base  Metals  Limited  (VBM),  the  holding  entity  for  Vale’s  energy transition metals business, at an implied enterprise value of US$ 26 billion. Concurrently, Vale and investment firm Engine No. 1 entered into a binding agreement pursuant to which Engine No. 1 will invest in VBM under the same economic terms. The total consideration to be paid to VBM under both agreements is US$ 3.4 billion, for a 13% equity interest.  

This strategic partnership will fast-track VBM’s expected US$ 25-30 billion capital program over the next decade and help drive a significant potential increase in VBM’s production from about 350kt/year to 900kt/year in copper and from roughly 175kt/year to more than 300kt/year in nickel. This program will generate jobs, economic growth, procurement and supplier opportunities as well as socioeconomic benefits in communities across the key critical mineral jurisdictions where VBM operates in Brazil, Canada and Indonesia.  

The total consideration of US$ 3.4 billion will be paid in cash to VBM at closing of the transaction, subject to customary adjustments. Manara Minerals will own 10% of VBM, while Engine No. 1 will hold  a  3%  stake.  The  closing  is  expected  to  occur  by  1Q24,  subject  to  conditions  precedent, including the approval of the relevant regulatory authorities.  

“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,” said Eduardo Bartolomeo, Vale’s CEO. "With our high-quality portfolio, we are uniquely positioned to meet the growing demand for green metals essential for the global energy transition, while remaining committed to strong social and environmental practices and sustainable mining." 

Robert Wilt, Executive Director of Manara Minerals and CEO of Ma’aden, said, “Manara Minerals’ investment into Vale Base Metals marks our first major investment into the global mining sector. This strategic investment signifies our confidence in Vale’s strategic minerals business and will facilitate growth in VBM’s world class asset portfolio across all of the countries it operates in. Manara Minerals brings long-term capital, mining experience, and deep sector knowledge, and will act as a key strategic partner in global supply chain resilience and energy transition efforts.”    

Chris James, Founder of Engine No. 1, said, “We are proud to support the Vale Base Metals team in driving the next stage of growth for these critical assets. Vale Base Metals is best positioned to supply the responsibly sourced raw materials needed to build the infrastructure of the future.” Erik Belz, Engine No. 1’s head of private capital, added, “Our private capital mission is to partner with companies to create value by operating assets in a responsible and sustainable way while delivering critical materials. We look forward to building this important platform with Vale Base Metals.”  
 

Transaction Background  

Over  the  last  18  months,  Vale  has  taken  a  series  of  strategic  actions  to  position  its  energy transition metals business as a critical mineral supplier of choice. This includes creation of VBM to drive operational  efficiency  and  leverage  a  distinct  future-facing  commodities  platform, supported by a new governance structure and dedicated board of directors with deep industry expertise, chaired by Mark Cutifani.  

VBM is uniquely placed  as  North  America’s  largest integrated  nickel  producer  and  among  the largest copper businesses globally with the scale, resources and capital to deliver critical minerals essential for the global decarbonization and electrification megatrends. The company has secured agreements to supply low carbon and high purity nickel to major automakers and is strategically focused on expanding mine life and development of growth projects across the portfolio.  

In nickel these include the Onça Puma 2nd furnace in Brazil, the Pomalaa and Morowali projects in Indonesia, and the Voisey’s Bay Mine Expansion in Canada. VBM is a top 10 copper producer in the Americas with an operating base concentrated in Brazil that includes the country’s largest copper deposit at Salobo with 40-plus years of remaining life, complemented by a strong pipeline of development and growth projects from Alemão, Cristalino and Bacaba in Brazil to the large- scale Hu’u project in Indonesia.  
 

About the Investors  

• Manara Minerals  

Manara Minerals Investment Company is a new venture between  the Saudi  Arabian  Mining Company (Ma’aden) and the Public Investment Fund (PIF) that was established to invest in mining assets globally and support the development of resilient global supply chains. The company aims to initially invest in iron ore, copper, nickel, and lithium. 

Manara  Minerals’ investments are  underpinned  by  a  focus  on  expanding  the  global  supply  of critical materials that will support the global energy transition. In addition, these investments will help drive growth and development in the countries the company invests in, creating economic opportunities for local communities, supporting the development of infrastructure, and aiding the transfer of skills and technology. For more information, please visit: www.manaraminerals.com  

• Engine No. 1  

Engine No. 1 is an investment firm that creates value for shareholders and companies by providing transformative capital, as well as operational and technological expertise, to industries that are undergoing fundamental transition.   The   firm is   focused on   the investment themes of decarbonization and the relocalization of North American supply chains. For more information, please visit: www.engine1.com