Brazil's Vale to sell Moatize coal mine, Nacala corridor to Vulcan (updated)

Vulcan Minerals

21/12/2021 16:21

(Adds details, share reaction, analyst comment)
    By Gabriel Araujo
    SAO PAULO, Dec 21 (Reuters) - Brazilian miner Vale SA
 VALE3.SA  announced on Tuesday a deal to sell its Moatize coal
mine in Mozambique and a connected railway corridor for $270
million to Vulcan Minerals, a subsidiary of India's Jindal
Group.
    Vale said in a securities filing that the company will
receive $80 million immediately and the rest at the close of the
deal, which still requires approval from Mozambique's
government.
    The transaction also includes a 10-year royalty contract
related to the mine's production and coal price conditions, it
added.
    Vale had announced earlier this year a goal of completely
exiting the coal industry, aiming to focus on its core
businesses and reduce its carbon footprint.  urn:newsml:reuters.com:*:nL1N2RP1R9
    The miner said in late October that Moatize could produce
about 12 million tonnes of coal per year, but was yet to reach
that figure. The linked Nacala logistic corridor is a 912-km
railway for coal transportation that also crosses Malawi.
    "I am pleased to announce this important step for the
responsible divestment of Moatize and NLC," Vale's Chief
Executive Eduardo Bartolomeo said in a statement. "This is
another accomplishment on our commitment to reshape our
company."
    Analysts at BTG Pactual saw the deal as "another issue
resolved" for Vale and reiterated a "Buy" rating for shares in
the Brazilian company.
    "This deal has been largely anticipated by investors, and
should not catch the market by surprise, but we believe this is
yet another indication of how committed the current management
team is to transforming Vale into a low-carbon miner," they said
in a research note.
    Shares in Vale were up 1.9% at 79.77 reais in early
afternoon trading, ahead of a 0.3% rise on the broader Bovespa
index  .BVSP , also boosted by higher iron ore prices.
 urn:newsml:reuters.com:*:nL1N2T60A8

 (Reporting by Gabriel Araujo; Editing by Andrew Heavens)
 ((Gabriel.Araujo2@thomsonreuters.com; +55 11 5644 7745;))