Vale to sell nitrogen plant
Vale S.A. (Vale) reports that it has signed an agreement with Petróleo Brasileiro S.A (Petrobras) to sell a nitrogen complex in Araucária, in the Brazilian state of Paraná, for US$234 million. The sale is subject to the fulfillment of precedent conditions, including the approval by the Conselho Administrativo de Defesa Econômica (CADE), the Brazilian anti-trust authority.
Araucária has annual production capacity of approximately 1.1 million mt of ammonia and urea.
Vale said the divestment of assets, which do not have synergies with the rest of its portfolio, is consistent with the company’s efforts to improve capital allocation and resources to generate additional funding for investments in priority projects with high potential for value creation. The sale of Araucária also contributes to an annual reduction of investments in sustaining operations of approximately $50 million.
The purchase price will be paid by Petrobras through installments accrued quarterly, adjusted by 100 percent of the Brazilian interbank interest rate (CDI), in amounts equivalent to the royalties due by Vale related to the leasing of potash assets and mining rights of Taquari-Vassouras and of the Carnalita project.
In February, Vale signed a leasing contract of potash assets and mining rights with Petróleo Brasileiro for a period of 30 years, allowing for the continuation of potash mining in Taquari-Vassouras and the development of the Carnalita project, in the state of Sergipe, Brazil. Vale said the leasing contract will ensure the extension of operations at Taquari-Vassouras, the sole potash producer in Brazil and one of only two producers in South America, finalizing the development of the Carnalita potash project and the study and development of other areas within the concession.