Vale close to approving Salobo mine expansion
The board of Vale is close to approving a $1bn expansion of its Salobo copper mine, two people familiar with the matter said, as the world’s top iron ore miner seeks to diversify and take advantage of growing international demand for the metal.
An e-mail about the approval was sent internally last week, according to one of the people, who was not authorised to discuss the matter publicly.
A second source said the expansion was on the agenda and expected to be approved at an October 24 board meeting to discuss the company’s quarterly results published the same day.
The Salobo mine, in Brazil’s Para state, began operations in 2012 and produces nearly 200,000 tons annually.
Vale declined to comment on Monday. Bloomberg reported last week the company was close to approving the expansion. The growing electric vehicle market and a scarcity of shovel-ready mining projects have fuelled demand for the metal. The copper pipeline has shrunk dramatically since 2011 and exploration has been increasingly less successful.
Vale, whose cash flow has surged in recent quarters as iron ore prices have rallied, has been mulling whether to spend those funds on diversification or remunerating shareholders through dividend hikes or buybacks, sources familiar with the matter say.