Brazil's Vale looking to ramp up copper, nickel output

Brazilian mining titan Vale is planning to accelerate its production of copper and nickel, amid positive expectations for growth in consumption of these metals for the global energy transition, while also seemingly paving the way for an IPO for its base metals division.

"All the efforts the major countries in the world are making today towards the energy transition lead to a scenario of greater demand for materials such as copper, nickel, among others, although there are variables that mean this demand and production may not see uninterrupted growth," Mauro Barros, CEO and partner of Ore Investments, a private equity firm specialized in mining sector told BNamericas.

"As a private equity fund we always make more conservative market projections than most companies and market analysts, but the expectation of increased demand in the coming years is quite realistic," added Barros. 

Vale now is expecting to produce 230,000-245,000t of nickel per year in the medium term, versus a projection of up to 190,000t for 2022.

The company sees global demand for nickel increasing 50% to 6.2Mt by 2030, "driven by the rapid expansion of EV [electric vehicle] sales, which should be four times higher by the end of this decade," Vale stated in a presentation to investors.

Meanwhile, the firm's medium-term forecast for copper output is now at 390,000-420,000t per year, compared with up to 285,000t predicted for 2022.

According to Vale, demand for copper across the globe is expected to rise by around 20% through 2030, reaching 37Mt. This will be fueled by growth in the EV industry and renewable energy projects.

"Base metals are undergoing a decades-long shift in demand due to the global energy transition to low carbon. Increased demand, along with shortages in supply, will attract significant interest across the industry," the company said in its presentation.

Vale, whose main line of business is iron ore, sees the expansion of its copper and nickel activities as helpful in its shift toward ESG practices, as more than 90% of the energy used by the company in copper and nickel production is from renewable sources.

IPO PLANS 

Vale's presentation to investors for nickel and copper operations comes amid growing expectations that the company is moving forward with plans to hold an IPO of its base metals unit.

Since its foundation, Vale has focused on iron ore and now, with growing demand for materials like copper and nickel, it wants to explore the full potential of its operations in those segments.

Companies executives have already admitted there is interest in a shares offering for its base metals divisions, but no exact agenda to do that has yet been revealed. 

Vale's full presentation to investors with its copper and nickel market projections can be seen here, in Portuguese.