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Vale has hired Canada's Bank of Montreal (BMO) to raise around US$500 million from bidders for cobalt that would be produced at its Voisey's Bay nickel mine in eastern Canada, four sources told Reuters.
The financing in return for future cobalt production could help fund Vale's underground development at Voisey's Bay, which has twice been put on hold, to extend the operation's mine life as the openpit is due to finish in 2021.
It would also tie into the company's plans to diversify away from iron ore.
CEO Fabio Schvartsman told an event in Sao Paulo this week the company wanted to reduce its proportion of iron ore earnings from 90% to 70% within two years, Reuters reported.
The cobalt streaming plans follow diversified miner Glencore (LN:GLEN) last month teaming up with the Ontario Teachers' Pension Plan to form a joint venture, BaseCore Metals, focused on base metals streams and royalties.
