Brazilian miner Vale is pressing ahead with the sale of two non-core assets: steelmaker Companhia Siderurgica do Pecem and bauxite miner Mineracao Rio do Norte, an executive at the company said April 28.
“There’s been a lot of cleaning up on non-core assets out of our portfolio and we have just two candidates left: CSP and MRN,” Gustavo Pimenta, executive vice-president of finances, said on a Q1 results webcast with analysts.
“The first process and the second process are both underway,” he said. “Those would be the last ones remaining on the list for (divestment) as we see it today.”
CSP produces steel slabs in northeast Brazil, and negotiations are said to have involved multiple mills keen to purchase Vale’s stake. The company, which has a capacity of 3 million mt/year, is a joint venture between Vale (50%), Dongkuk (30%), and South Korean steel producer Posco (20%).
In 2021, it produced 683,200 mt of premium quality steel from a total steel production of 2.8 million mt.
Prices for steel slab were at Eur800/mt ($840.50/mt) CFR Northern Europe on April 28, according to S&P Global Commodity Insights Platts. Slabs are the feedstock for hot-rolled coil, whose price was unchanged on the day at Eur1290/mt ex-works Ruhr.
Currently, MRN in the state of Pará in northern Brazil is listed as the world's third largest bauxite mine. MRN has recently supplied about 14 million mt/year of bauxite from a total capacity of about 18 million mt/year, according to the company's website.
Vale owns around 41% of MRN. Other shareholders include Brazilian aluminum producer Companhia Brasileira do Alumínio and an international consortium of aluminum producers Hydro, South32, Rio Tinto, and Alcoa.
Vale has talked earlier of selling an MRN stake to Hydro, but the two never struck a deal.
Bartolomeo went on to talk about how the company had recently exited its nickel asset, Vale New Caledonia (VNC), the Mozambique coal mine, Moatize, and its Midwestern iron and manganese system in Brazil.
On the value unlocking process, Bartolomeo said: “Vale is currently exploring avenues to extract value from the base metals business, and this is the last reshuffle that Vale has to do.” It could involve establishing a partnership, a spin-off or leaving the operations as they stand, he said.
The firm will be able to produce more than double the amount of nickel should the right conditions present themselves, and will also be able to produce green nickel for the energy transition, said Deshnee Naidoo, executive vice-president, base metals.
The LME official cash nickel price settled at $33,300/mt on April 27, up 1.45% on the day.
