Vale plans to invest $2.6 billion in decarbonisation initiatives

The company did not specify the timing of these investments

Brazilian mining company Vale plans to invest up to 13 billion reais ($2.56 billion) in decarbonisation initiatives. This was reported by Reuters, citing the company’s sustainability report.

Vale has not specified the timeframe for these investments. The sum includes up to 4 billion reais for decarbonisation operations, with 24 per cent to be invested in the medium term and 76 per cent in the long term.

A further 8 billion reais is earmarked for the construction of industrial complexes focused on low-carbon technologies, including transition technologies in steelmaking and the development of iron ore briquetting. The remaining 1 billion reais will go towards research and development.

Between 2020 and 2025, Vale invested 9 billion in decarbonisation initiatives.

As Graciel Parenti, Executive Vice-President for Sustainable Development, noted in an interview with the agency, thanks to these initiatives, Vale sees the potential for financial and environmental returns from its business. As part of the company’s management system, all projects and decisions at this level are assessed using an environmental, social and governance (ESG) matrix, which identifies potential risks and opportunities.

The company also warned that it could face carbon costs of up to 22 billion reais at present value due to carbon pricing mechanisms, with a significant impact expected from 2030 onwards.

It is worth noting that Vale sees no signs of a fall in demand on global metals markets linked to the conflict in the Middle East. Furthermore, it has recorded an increase in margins, as the war with Iran has disrupted raw material flows.

The company is focusing on developing its own assets rather than seeking acquisitions. Furthermore, global demand for critical minerals has been extremely favourable for it.