By Clara Denina and Jeff Lewis
LONDON/TORONTO, Jan 21 (Reuters) - Vale SA has
hired investment banks Barclays Plc and Standard
Chartered to sell its Mozambique metallurgical and
thermal coal mine and port project, three sources said on
Thursday, as the Brazilian miner works to become carbon neutral
by 2050.
Vale joins top miner BHP and others who
are keen to shed coal, burnt to produce electricity, as global
investors ditch holdings in polluting fossil fuels.
Vale, the world's second-biggest iron ore miner, on Thursday
agreed to buy out its minority partner in the loss-making
Moatize coal mine and Nacala Corridor rail and port projects in
Mozambique ahead of a planned sale.
It is unclear what the assets might fetch, the sources said,
declining to be identified as the discussions are confidential.
Vale, Barclays and Standard Chartered declined to comment.
In 2019, Vale slashed its valuation of the assets due to
technical and operational issues.
The miner's coal division posted a loss of $213 million in
adjusted earnings before interest, tax, depreciation and
amortization in its most recent quarterly result.
The operations are expected to reach 15 million tonnes a
year in the second half and 18 million tonnes a year in 2022,
according to Vale.
Vale and its advisers are expected to target companies in
India and China, including state-backed metals trader China
Minmetals Corp as well as India's JSW Steel Ltd and
state-owned Steel Authority of India Ltd
China produces and consumes about half of the world's coal
and is planning to allow more provinces to start building coal
power plants starting in 2023.
A diplomatic row has resulted in an effective ban on China's
imports of Australian coal, meaning the country is eager to find
other sources of import, one of the sources said.
India is the world's second-largest coal importer after
China.
(Reporting by Jeff Lewis and Clara Denina; additional reporting
by Helen Reid in Johannesburg; Editing by Lisa Shumaker)
Standard Chartered (STAN)
Barclays (BARC)