Vale’s new boss pledges to grow copper output after falling behind rivals

“We have fallen behind on copper,” CEO Gustavo Pimenta said in his first public remarks since starting his new role on Tuesday. He was previously the miner’s chief financial officer.

Vale is on track to produce between 320,000 and 355,000 metric tons of copper this year, according to company guidance, versus what Pimenta described as annual output of more than 1 million tons by top players in the market.

At a press conference, Pimenta also batted down expectations for an initial public offering for the firm’s base metals unit, saying that is not under consideration right now.

Vale owns 90% of Vale Base Metals, which groups together its nickel and copper assets. Manara Minerals, a joint venture between Saudi Arabian miner Ma’aden and Saudi Arabia’s Public Investment Fund, bought a 10% stake earlier this year.

Pimenta said once the base metals unit grows its copper production to some 500,000 tons of annual production, the company will then consider whether it needs to tap capital markets for funding. He did not provide a timeline for when he expects to reach that output goal.

Executives from Vale and state-owned development bank BNDES also announced they will create a 1 billion real ($183.6 million) fund to support local mineral projects key to the energy transition away from fossil fuels.

Vale and BNDES will contribute up to 250 million reais each to the fund.

Pimenta was named CEO in late August, wrapping up a succession process in which some board members departed amid accusations of political intrigue.

President Luiz Inacio Lula da Silva’s government has pressured Vale to invest more in Brazil.

($1 = 5.4458 reais)

(By Marta Nogueira and Andre Romani; Editing by Kylie Madry, Jamie Freed and David Alire Garcia)