Why Vale invested in Ligga Mineração
Vale bought 30% of Ligga – a mining company in the Carajás region – for $190 million – a relatively small investment for the company, but which will give Vale access to high-quality ore and bring important logistical synergies in the short term. Ligga owns the Ferro Sul mine, […] The post Why Vale invested in Ligga Mineração appeared first on Brazil Journal .
Vale acquired a 30% stake in Ligga Mining, a regional mining company near Carajás, for US$190 million. This investment, though relatively small for the company, will grant Vale access to high-quality ore and offer significant logistical benefits in the near future. Ligga owns the Ferro Sul mine, which produces iron ore between Parauapebas and Curionópolis in the heart of Carajás.
The mine generates 2 million tons of ore annually and aims to increase production to 8 million tons by 2028. To achieve this, Ligga will need to invest in a new processing plant and infrastructure works. The Vale contribution was made to fund this expansion plan, according to sources close to the company. The investment represents 100% primary capital, with no option for the remaining capital, although Vale is certainly interested in increasing its stake due to the asset's quality.
The ore from Ligga contains about 60% iron, matching Vale's average product quality, which stands at 61% iron. The mine is located in an area where Vale CEO Gustavo Pimenta expects economies of scale, as production will be transported via the Carajás railway and the port terminal owned by Vale in São Luís. The investment also includes a long-term take-or-pay agreement for the entire mine's production, which operates for the mine's entire 12-15 year lifespan.
However, the mine has additional mineral bodies that would require feasibility studies and a new project, potentially extending its lifespan. Ligga is controlled by the Santa Elina Group, owned by entrepreneur Paulo Brito, the same person who controls gold listed company Aura Minerals on Nasdaq. Santa Elina was created in 2011 to manage the iron mineral rights of the Brito family in Pará, but the Ferro Sul mine only began operations in 2022, initially producing 600,000 tons per year.
For Vale, the Ligga investment is relatively small. The 2 million tons the mine currently produces is compared to Vale's 336 million tons. The company's revenue, around US$200 million, is not even 1% of Vale's US$38 billion made last year.
Written by urgent.news from Brazil Journal's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
