By Brazil Stock Guide – Vale S.A. (VALE3) CEO Gustavo Pimenta clarified that ongoing negotiations with the Brazilian government regarding the renewal of rail concessions do not include any new investments or acquisitions, Reuters reported.
Speaking at a press event on Thursday, Pimenta dismissed the notion that the miner’s talks with the government were connected to a potential purchase of Bamin, a mining company in southern Bahia. The statement follows recent media reports suggesting the government had attempted to persuade Vale to take on part of the Bamin project as part of the negotiation for the renewal of the Carajás and Vitória a Minas rail concessions.
“This agreement has nothing to do with Vale investing in new projects or railways, nothing like that. It’s a separate agreement,” Pimenta said. His comments come after Estado de S. Paulo reported that, in final talks over the renewal of the two rail concessions, the government attempted to convince Vale to take over a portion of the Bamin project. The Bamin project involves expanding operations through the completion of the Porto Sul terminal in Ilhéus (BA) and the Oeste-Leste Integration Railway (Fiol).
Pimenta also acknowledged that there were some disagreements in negotiations, but refrained from providing specifics. “We reached an agreement late last year with the Ministry of Transportation, which was evaluated by the Federal Audit Court (TCU), and there were some differences,” he stated. “We have a confidentiality agreement, so I will not go into the details, but we are still willing to continue advancing the discussions.”
Despite these differences, the CEO reiterated Vale’s openness to dialogue, stressing that the company is committed to resolving these matters, which he described as important. Vale has already outlined a $13.4 billion (BRL 67 billion) investment plan in Brazil through 2030, focusing on its ongoing projects rather than new ventures.
As for the potential acquisition of Bamin, Pimenta confirmed that Vale is always evaluating development projects within Brazil but stressed that decisions are made based on profitability and risk assessments. He noted that the company had yet to make any decisions regarding Bamin, which is controlled by Eurasian Resources Group from Kazakhstan.
Earlier this year, Marcelo Bacci, Vale’s EVP of Finance and Investor Relations, stated that the company would only consider acquiring Bamin if it found an economically viable way to develop the project, given its significant logistical challenges. Bamin currently produces iron ore at the Pedra de Ferro mine and is seeking to ramp up production once its infrastructure projects, including the Porto Sul terminal and Fiol, are completed.