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Vale rules out mergers, focuses on growth, decarbonization

Company aims to regain iron ore lead and expand high-grade portfolio

10/31/2025

Vale is currently focusing on its own assets rather than pursuing mergers and acquisitions, said CEO Gustavo Pimenta on Tuesday (28). When asked about the possibility of a counteroffer related to the merger deal between Anglo American and Teck Resources, the executive stated that “is not on the company’s agenda.”

“Our main differentiator today is the development of our own ore bodies,” Mr. Pimenta told reporters after participating in Exposibram, a mining conference organized by the Brazilian Mining Institute (IBRAM) in Salvador, Bahia. “We have a mineral endowment, especially in Carajás, that allows us to grow organically through project development. That’s the company’s focus,” he said.

In September, Anglo American signed a merger agreement with Canada’s Teck Resources, which, if finalized, would form a copper mining powerhouse valued at roughly $50 billion. Anglo American, listed on the London Stock Exchange, will own 62.4% of the combined firm, while Teck shareholders will hold the rest.

When asked if Vale might consider acquiring another copper producer, Mr. Pimenta reiterated that the company is not pursuing mergers or acquisitions.

Even so, he did not rule out the possibility of doing business with Bahia Mineração (Bamin). “We are always monitoring all development projects in Brazil, especially iron ore,” he said. “We have other capital allocation priorities, but we’re always looking at opportunities.”

According to Reuters, shareholders of Bamin—part of the Eurasian Resources Group of Kazakhstan—are currently evaluating interest from three potential investors, said Eduardo Ledsham, the company’s CEO. The investors might acquire either a stake or full control of the iron ore producer, whose expansion plan would need about $6 billion in investments. Market expectations suggest that one investor will be chosen to proceed with negotiations, likely by early 2026.

Speaking at Exposibram, Mr. Pimenta said Vale expects to reclaim its position as the world’s largest iron ore producer this year, aiming to reach 360 million tonnes of annual output by the end of the decade. The company’s third-quarter production was already its highest since 2018. Vale lost the top spot to Anglo-Australian Rio Tinto shortly after the Brumadinho disaster in 2019, when a tailings dam at an iron mine collapsed, killing 270 people.

Mr. Pimenta reaffirmed Vale’s dedication to expanding its product lineup to meet customer needs and support global decarbonization efforts.

“We believe these cycles will remain constructive for the mining industry, especially for high-grade ores that are key to the energy transition,” he said.

According to the executive, Vale is well-positioned in the global effort to cut greenhouse gas emissions and highlighted the company’s green briquette, an innovation for lower-carbon steelmaking. “This decarbonization route favors high-quality ores,” he said. “We’re potential winners in the world’s decarbonization agenda.”

As Valor reported on October 1, when Mr. Pimenta marked one year as CEO, the company has been working to demonstrate to investors improvements in dam management and safety practices.

“Now that we no longer have any level-3 dams, we can attract more investors,” Mr. Pimenta said Tuesday. “The mining of the future means ending the use of tailings dams.”

The journalist’s travel was facilitated by an invitation from Nexa

*By Kariny Leal — Salvador

Source: Valor International

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Gerdau targets renewables to move forward with decarbonization

Company will invest R$1.5bn in renewable energy to become more competitive in steel sector

11/30/2022

The announcement that Gerdau has entered into a partnership with asset-management Newave Capital (NW Capital) to purchase a 33.33% stake in Newave Energia puts the steelmaker at a new level in decarbonizing production, in addition to diversifying its business and making it more competitive in the steel sector.

The plan aims to develop new large-scale (greenfield) power generation projects with a capacity of approximately 2.5 GW, exclusively from solar or wind sources. Part of the production also aims to supply Gerdau’s industrial units in Brazil with renewable energy, as part of its commitment to reduce its greenhouse gas emissions, which are quite intense in electro-intensive sectors such as metallurgy.

Through Gerdau Next the company will invest up to R$1.5 billion of equity capital in Newave Energia, divided into two stages. In the first phase, the company will invest R$500 million in 2023, and the second phase will include an investment of up to R$1 billion, conditioned to the achievement of performance goals.

Juliano Prado — Foto: Claudio Belli/Valor

Juliano Prado — Foto: Claudio Belli/Valor

Juliano Prado, vice president of Gerdau and leader of Gerdau Next, told Valor that the business is based on the pillar of sustainability for the reduction of carbon emissions by 10% within ten years, seeking to reach 60% of energy needs through self-production. Today it is 25%.

In parallel, the company aims to reduce its greenhouse gas emissions (CO2e) of scopes 1 and 2 of its inventory, to 0.83 tonnes of CO2 per tonne of steel in 2031, a value approximately 50% lower than the global average of the steel industry.

“Today we have a designed and prospected pipeline of six greenfield energy parks. When these parks come into operation, or Newave acquires a new park, the plan is that 30% of the energy produced will go to our self-production. We are talking about Newave reaching close to 2.5 GW both in solar and wind”, he said.

The free energy market is a segment that the company is keeping an eye on to expand its business. Brazil currently has about 10,700 free consumers, but the government’s proposal that all consumers served at high voltage can opt to buy electricity from any supplier as of January 1, 2024, opens space for new competitors.

“The other 70% of the energy produced will be commercialized in the free market. We also want to have a leading role in having more accessible prices for businesses that want to buy from Newave Energia,” said Mr. Prado.

In the energy transition context, partnerships such as this one have been taking place more frequently in the electric sector, in which oil, metallurgy, and steel companies, for example, associate with other companies to have some competitive differential.

In Gerdau’s case, decreasing the cost of steel was one of the differentials to closing the deal. Besides being the most competitive in the country with a prominent place in the expansion of the system, subsidized energy sources such as solar and wind have contracting benefits to other conventional sources.

“This R$1.5 billion foreseen in our business plan for investments in Newave is equity capital. Another R$3 billion will come from the asset-management firm Newave Capital and XP, meaning we will also have third-party capital”, he states.

New projects usually have a higher risk, but with higher gains. And because it is strategic information, Mr. Prado does not reveal how much the investments will reduce production costs, but he stresses that the project gains are above the cost of capital with high double digits.

He sees the governance and the team as a differential advantage, with professionals from large energy companies, such as Siemens Gamesa and Echoenergia, among others.

This is not the only investment in renewables and the executive guarantees that it will not be the last. There are others, besides the production mix with scrap and charcoal that supply the carbonization plants in the pig iron and steel chain.

*By Robson Rodrigues — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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