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Vale’s (NYSE: VALE) Canadian subsidiary has agreed to sell its 50% stake in California Steel Industries (CSI) to Nucor (NYSE: NUE) for $400 million, the company said.
The Brazilian mining giant said that the deal is linked to its strategy of focusing on its core businesses and a commitment to a leaner portfolio.
In March, Vale sold its nickel and cobalt operations in New Caledonia, a French territory in the Pacific, to the Prony consortium.
The miner also announced in June that it plans to spend $150 million on extending its mining activities in the Canadian province of Manitoba.
Vale’s latest divestment will give Nucor a majority ownership in California Steel and give the company a “strong presence” on the West Coast, Leon Topalian, Nucor’s president, said in a press release.
“This acquisition will grow our portfolio of value-added sheet products, provide opportunities for increased internal shipments and enable us to provide our downstream businesses in the region such as Verco and Hannibal Industries with sheet steel products,” said Topalian.
California Steel has the capability to produce nearly two million tonnes of steel products a year and serves customers in the construction, service and energy sectors.
The transaction is expected to be completed early next year.
(This article first appeared in The Northern Miner)
