Vale SA and Glencore PLC are considering a joint copper project in Canada as the two companies look to increase their exposure to a metal projected to be in short supply as the world electrifies.
The proposed collaboration between Vale’s base metals unit and the Swiss commodities giant is to jointly develop a US$1.6 billion to US$2 billion project at their neighbouring properties in the Sudbury basin, Vale said in a statement Tuesday. It would churn out 880,000 metric tons over 21 years.
While Vale and Glencore have been mulling a Canadian partnership for two decades, the agreement is the latest example of collaboration in the industry. Miners are teaming up to contain costs and lift output as ore quality deteriorates and new projects get pricier to develop — at a time when demand for the wiring metal is increasing due to the energy transition and building of data centres to power AI.
The deal may help appease Glencore investors who have grown increasingly frustrated by the stock’s under-performance, with the company’s copper production expected to drop for a fourth straight year.
Vale has laid out a plan to double the base metals unit’s production capacity to about 700,000 tons a year by 2035. That would still be modest compared to rivals, and the Brazilian firm reportedly held on-and-off talks about a combination with Teck Resources Ltd. before the latter agreed to merge with Anglo American PLC.
The Vale-Glencore agreement in Canada provides a framework to explore combining underground operations, including deepening an existing shaft at Glencore’s Nickel Rim South Mine and developing new drifts to tap copper deposits.
The intention is that Vale and Glencore will transition to a joint venture as equal partners in the project. Besides copper, the companies would also produce nickel, cobalt, gold and other critical minerals.
Detailed engineering, permitting and consultation work will take place next year, with a final investment decision pencilled in for the first half of 2027.
