Vale strengthens ties with govt with US$12bn investment in Pará iron ore, copper ops

Brazilian mining giant Vale is set to unveil details of a 70bn-real (US$12.3bn) investment in iron ore and copper operations in Pará state, a move with strong political significance.

The investment plan, covering the period from 2025 to 2030, was due to be formally announced on Friday at a ceremony attended by company executives, President Luiz Inácio Lula da Silva, chief of staff Rui Costa and mines and energy minister Alexandre Silveira.

The investments will be focused on Vale’s Carajás operations, according to a statement from the presidential palace.

Carajás is a key hub for production of iron ore, manganese, copper, gold and nickel. Vale operates the world’s largest iron ore mine there, as well as copper production sites in Sossego and Salobo.

"Vale is using this announcement to highlight a necessary investment – expanding its production capacity and reserves in Carajás, which is crucial for the future of its operations. Carajás has exceptionally high-quality iron ore and existing infrastructure that enables low-cost production, giving Vale a significant competitive advantage in the face of more challenging times regarding iron ore prices," Valdir Farias, CEO of mining consultancy Fioito, told BNamericas.

The announcement also carries significant political weight, coming just months after a complex leadership transition at the mining company.

"This investment ceremony also brings the company closer to the federal government, easing tensions that have arisen in the recent past," said Farias.

In October 2024, Gustavo Pimenta, then-CFO of Vale, took over as CEO, replacing Eduardo Bartolomeo.

The selection process for Vale’s new CEO was controversial, with the federal government – despite holding an indirect stake of less than 10% in the company through the Previ pension fund – attempting to influence the choice.

Bartolomeo’s tenure was criticized by the Brazilian government for an alleged lack of dialogue between the company and federal authorities.

Lula has been a strong advocate for Vale making higher investments in Brazil, not only in mining but also in infrastructure.

Since taking office, Pimenta has been strengthening ties with the government and held a meeting with Lula in January.

"We had a meeting. I was very, very happy with the impression the CEO of Vale gave me. We want to discuss several things that we need to address to make Vale produce more again and go back to being the first or second [largest mining company] in the international market. Brazil is important for Vale, but Vale is also important for Brazil," Lula said after the meeting.

Iron ore and copper

Vale’s plans consolidate an upward trend in investments in iron ore and copper projects in Brazil.

According to mining association Ibram, the iron ore sector is expected to receive US$19.6bn in investments between 2025 and 2029, up from US$17.3bn in 2024-28.

Meanwhile, the copper sector is projected to attract US$7.3bn in 2025-29, an increase from US$6.7bn in 2024-28.

Railroads

Vale’s closer relationship with the government is also generating additional investments.

Recently, the company reached an agreement with the government for the early renewal of its concessions for the Carajás and Vitória-Minas rail lines.

According to the government, the agreement is expected to generate 17bn reais in fees, which will be invested in freight rail projects.

The Carajás railway connects Pará and Maranhão states with the port of São Luís and is used by Vale to transport iron ore. The Vitória-Minas railway runs through Minas Gerais and Espírito Santo states, also serving as a key route for iron ore transportation.