Call them rare, critical, or more generally strategic. Are the metals decisive for the energy transition and Arabs, as well as on the players of half of Europe, have decided to put your hands on those too. Proof of this is the monstrous operation through which the Saudi fund Manara Minerals (a joint venture between Saudi Arabia's sovereign wealth fund and the local Ma'adene mining company) took over, for 3,4 billion of dollars, the 10% of the Brazilian Vale Base Metals Limited, born from the spin-off of some mining activities of the Vale group. Another 3% of the newborn company, which will be based in Toronto and according to the Brazilian press will in turn be listed on the Stock Exchange, was bought from the California fund Engine No.1, specializing in energy transition investments. This means that already today Vale Base Metals is valued at 26 billion dollars, ie 40% of the entire value of Vale (67,7 billion dollars).
Energy transition: Saudi Arabia focuses on rare metals
Not only that: according to experts, the company that will focus its own business on lithium, copper, nickel and cobalt, with activities mainly in Brazil but also in Canada and Indonesia, is destined within a few years to exceed the value of the parent company and within ten years will field investments for a value estimated between 25 and 30 billion dollars. The metals mentioned will in fact be among the most requested by the market in the coming decades, given that they are needed for the electric car industry and, in the case of copper, also for the construction of solar panels and wind turbines and therefore for generating clean energy. As reported by the Brazilian financial newspaper Valor Economico, the production of lithium, copper, nickel and cobalt is expected to increase from 350 tonnes to almost 1 million tonnes per year, of which 300 tonnes of nickel alone.
Vale Base Metals: the largest Arab investment in Brazil
The Vale Base Metals operation is particularly significant also with respect to the immense financial capacities of the Arab world: it is in fact the largest Arab investment in Brazil and third in the world for the sovereign wealth fund of the Saudi country, in this case linked in a joint venture with Ma'adene. The completion of the deal is expected for the first quarter of 2024, but in the meantime the president of Vale, Edward Bartholomew, already rejoices: "This agreement positions us in a privileged position to meet the growing demand for critical minerals", he said, while other sources confirm to Valor Economico that the IPO should take place "within two or three years". "The one in Vale Base Metals - points out Robert Will, executive director of Manara Minerals and CEO of Ma'adene - is our first major investment in the global mining sector, which we consider increasingly strategic".
Vale Group: quarterly decline
Meanwhile the Vale group, listed on the Ibovespa index of San Paolo, is not going through a great moment: after reaching an all-time high in January of over 90 reais per share, from beginning of the year lost 24%, closing last Friday below 70 reais. Second quarter accounts were also released last week, which showed a drop in net profit by 77% to 5 billion reais, equal to approximately 1 billion euros (892 million US dollars). Ebitda was also down, due to the drop in the sale prices of iron and nickel. Despite this, Vale has confirmed the distribution of a big dividend from 8,27 billion reais, equal to almost 2 reais per share.
