Vale Base Metals touts internal growth over mergers and IPO push

Being ready to pursue an IPO requires both the market window and an organization ready to pull the trigger, Vale CEO Shaun Usmar said. Photo by Michael Nagle/Bloomberg

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“Organic growth is the best way to add value for us,” Vale Base Metals chief executive Shaun Usmar told reporters after the company’s first investor day event, held Tuesday in Toronto. “A lot of the consolidation doesn’t necessarily add to immediate increases in volumes that the planet needs.”

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The CEO’s comments came in response to a question on whether Vale Base Metals was seeking large-scale merger opportunities, four months after reports it had engaged in talks with Teck Resources Ltd.

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Usmar joined Vale in 2024, about a year after the Brazilian mining company separated its base metals business from its iron ore operations and sold a 10 per cent stake to Saudi Arabia. He was tasked with turning around the struggling copper-and-nickel division — which operates mines in Brazil and Canada and has joint ventures in Indonesia — and preparing it for a potential listing.

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Being ready to pursue an IPO requires both the market window and an organization ready to pull the trigger, Usmar said.

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Vale has talked about doing an IPO of its base metals business for more than a decade, though there was no discussion of such plans during Tuesday’s formal presentation. Usmar told BNN Bloomberg Television earlier this month that he’s aiming to get the business “IPO-ready” by around the middle of this year.

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Vale chief financial officer Marcelo Bacci, who also attended the event, suggested the timing isn’t right since today’s market wouldn’t pay for the unit’s growth potential.

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Vale Base Metals reiterated its goal of about doubling its annual copper production to approximately 700,000 metric tons a year by 2035, along with highlighting other projects that could allow to expand and extend the life of its mines, during the event.

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“We expect the company to deliver this growth to create a situation where the market recognizes that value — and then we’re going to discuss down the road whether or not it would make sense,” Bacci told reporters. “If it’s going to be in six months, in one year in two years — nobody knows. But it’s important to be ready.”

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