The Public Investment Fund (PIF) is currently leading in the bidding war for roughly 10 percent of Vale’s nickel and copper operations. The Saudi Arabian investment firm, in a joint venture with state miner Maaden, is looking to acquire a stake worth around $2.5 billion. Advanced discussions are taking place between the Brazilian miner’s and the Saudi joint venture.
Vale had issued a statement earlier this year revealing their intentions to sell stakes. Their bid is being weighted against offers made by the Japanese trading house Mitsui & Co and the Qatar Investment Authority.
Read: PIF, ACWA Power to develop $3.2 bn Saudi solar projects
A Bid for Minerals, A Bid for Vision 2030
The joint venture between PIF and Maaden has been in the works since January of this year, with the aim to invest in mining assets globally and strengthen Saudi Arabia’s strategic positioning in the midst of a global energy transition and on the track to Vision 2030.
The bid underscores Saudi Arabia’s commitment to nurturing strategic access to minerals in an attempt to reduce its reliance on oil revenues. By leveraging expertise and venturing into the mining sector, they ensure long-term access to iron ore, copper, nickel, and lithium. These minerals that are essential for various emerging industries, such as energy technologies and electric vehicles. Nurturing domestic expertise is in line with PIF’s Local Content Growth Program, “MUSAHAMA,” which is dedicated to uplifting the private sector and developing local industries.
Vale Approaches the Middle East
This possible agreement comes almost a year after Vale SA began studying the possibility of ‘mega hubs’ in Middle Eastern countries. Saudi Arabia, United Arab Emirates, and Oman are considered sites for sites that would produce low-carbon steelmaking products for both domestic use and export. Vale also operates mines in Brazil, Canada, and Indonesia. It is not certain that the deal will fall in place, and an agreement is reached, it is expected to take up to several weeks.
For more banking and finance stories, click here.
