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Vale SA (NYSE:VALE) is committed to investing in Brazil’s first fund to support critical minerals as it seeks to diversify, the new chief of the world’s No. 2 iron ore supplier said Wednesday.
Vale has 90% of its revenue coming from the steelmaking ingredient and wants to boost copper production, Chief Executive Officer Gustavo Pimenta said at a press conference.
“The industry’s big challenge today is to bring these critical minerals into operation, develop these projects, bring these projects to the commercial stage,” he said.
The fund, backed by Vale and Brazil’s development bank BNDES, selected a consortium formed by JGP Asset Management, BB Asset and Ore Investments to manage the 1 billion reais ($184 million) private equity fund created to support research and exploration of strategic minerals needed for the energy transition.
The announcement was the first by Vale’s new top boss, who took the helm Tuesday. Restoring government relations is one of the company’s top priorities as Vale seeks to permits to expand iron ore production and logistics. The miner also is negotiating a settlement over a deadly mining disaster in 2015.
The Rio de Janeiro-based company and the bank will seed the fund with as much as 250 million reais each, allowing the fund managers to focus on raising capital. The money will be invested in 20 junior and mid-sized companies working in mineral research, development and implementation of strategic mineral mines in Brazil, starting in March.
(By Mariana Durao)
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