The deal is estimated at $540 million. Previously, the company owned 55% of shares in Aliança Geração de Energia

The Brazilian mining company Vale has signed a commitment to acquire a 45% stake in the energy company Aliança Geração de Energia (AGE), a joint venture with Cemig Geração e Transmissão. After the deal closes, Vale will own 100% of AGE’s shares. It is reported by Kallanish.

The deal is estimated at BRL 2.7 billion ($540 million).

«This decision was made in the context of Cemig’s divestment plan announced in 2020. As shareholders of this company and given that we currently use a significant portion of the energy produced by AGE, we have decided to exercise our pre-emptive right to acquire,» Vale explains.

The deal is part of the mining company’s plan to build an energy platform that may include investments in other energy assets.

«After the agreement is concluded, we will look for potential partners to develop a project aimed at decarbonizing our facilities using renewable energy sources at competitive prices,» Vale adds.

The transaction is subject to approval by Cemig shareholders and to customary conditions precedent, such as antitrust approval.

The electricity supplier is strategically important to support Vale’s energy strategy based on renewable energy sources in Brazil.

AGE operates seven hydroelectric power plants in the state of Minas Gerais and three wind farms in the states of Rio Grande do Norte and Ceará. All assets have an installed capacity of 1438 MW and an average actual guaranteed capacity of 755 MW.

As GMK Center reported earlier, in 2023, Vale increased iron ore production by 4.3% year-on-year – to 321.15 million tons, while sales of raw materials decreased by 1.5% year-on-year – to 256.79 million tons. At the same time, shipments of iron ore pellets increased by 8.1% y/y – to 35.8 million tons in the period under review. In 2024, the company plans to produce 310-320 million tons of ore, while pellet production is forecast at 38-42 million tons.