Mining: With a Value of $1.2 Billion, Vale Validates Completion of Asset Sale in Corumbá (MS) to Batista Brothers Group

Vale Confirms Completion of Mining Sale in Corumbá to Batista Brothers Group. The Expectation Is That the “JBS of Mining” Will Take Over Operations in the Pantanal Early in the Second Half of This Year.

At the end of last Friday (07/15), miner Vale announced the completion of the sale of assets from the Central West system, which refers to mining in Corumbá and Ladário, after 46 years of presence in the region. J&F Investimentos acquired the rights and belongs to brothers Wesley and Joesley Batista.

The Deal Between Vale and the Batista Brothers Was Concluded with an Investment of US$ 1.2 Billion

The exploration rights for iron and manganese in the Pantanal, in addition to the river transport company, involved an extremely high total investment of about US$ 1.2 billion, with the remaining payment needed to complete the transaction being US$ 150 million paid by J&F Investimentos, owned by brothers Wesley and Joesley Batista. The brothers acquired the rights to all the assets on their own. 

“Vale informs that it has completed on this date (July 15) the sale of its assets from the Central West System to J&F Mineração Ltda, controlled by J&F Investimentos S.A., with the receipt of US$ 150 million. This transaction reinforces Vale’s strategy of portfolio simplification, focusing on core businesses and growth opportunities, guided by disciplined capital allocation,” stated the note issued by Vale.

Thus, the official communication had to occur because Vale is a publicly traded company and needs to make notifications to the market. Therefore, with this confirmation of the completed sale, the new mining company is already able to take over 100% of the operations. Industry experts noted that J&F planned to assume the unit’s operations starting in November of this year.

J&F Mineração Will Assume Unit Projects in November 2022

Thus, according to industry experts, the new mining company was set to take over all projects at the Corumbá unit in November of this year. However, there were indications in the first half that the procedures could be expedited to the end of July or early August.

The sale was announced on April 6 and corresponds to the acquisition of assets from Mineração Corumbaense Reunida S.A., Mineração Mato Grosso S.A., International Iron Company, Inc.; and Transbarge Navegación Sociedad Anónima.

The asset package transfers the rights to explore iron ore, manganese ore, and all logistics of the Central-West system. It is important to state that the current contracts in the take-or-pay model—written agreements between a buyer and a seller that obligate the buyer to pay regardless of whether or not the good or service is delivered by the seller—were also incorporated into the negotiation. About 1,000 Vale employees were transferred to the new mining company.

“Under the agreed terms, the enterprise value of the transaction is approximately US$ 1.2 billion for a set of assets that contributed US$ 110 million of adjusted EBITDA to Vale in 2021. At the closing of the transaction, Vale will receive about US$ 150 million, in addition to transferring to the buyer the obligations related to the take-or-pay logistics contracts, subject to the approval of applicable counterparties and other existing liabilities in the set of assets of the referred companies,” detailed the note from Vale issued in April of this year.