Vale allocates up to US$3bn to base metals push next year

Brazilian mining giant Vale, a global iron ore powerhouse, presented a US$6.5bn capex plan for 2024, with US$2.5-3bn allocated to energy transition metals such as copper and nickel.

This year’s capex totaled US$6bn.

The energy transition bet comes amid estimates of rising global electric vehicle demand.

Copper and nickel demand will rise 16% and 19% through 2030, the head of Vale Base Metals, Deshnee Naidoo, said during an investors presentation on Tuesday in London.

EV sales will expand 24% per year through 2030, Vale said.

But the move also carries risks.

"Vale has deep experience in iron ore and I believe it should continue to put a great emphasis on this area. Historically, Vale does not have much experience with the development of assets in the copper and nickel area, and we have to remember that there are many new technologies in development," José Carlos Martins, CEO of mining company Cedro Mineração and founder of metals consultancy Neelix, told BNamericas.

“Perhaps all this estimated demand for electric vehicles fueling the copper and nickel segments will be transferred to other materials in development, such as sodium batteries. But investments in copper and nickel are a challenge that Vale imposed on itself. Now, time will show us whether this will work,” added Martins, who is a former director of Vale.

PRODUCTION 

Vale's 2024 copper guidance is 320,000-355,000t, compared with 325,000t this year, while 2026 production should reach 375,000-410,000t. 

Nickel production is set to reach 165,000t this year, expected to reach 160,000-175,000t in 2024 and 210,000-230,000t in 2026.

Iron ore output is expected to reach 315Mt this year, 320Mt in 2024 and 340-360Mt in 2026.