Brazil's Vale forms joint venture with power company Cemig, reduces stake in controversial Amazon dam
Brazil's Vale SA agreed to form a joint venture with power company Cemig to manage some energy assets. The world's leading producer of iron ore will also sell part of its stake in a controversial hydroelectric dam in the Amazon.
According to Wall Street Journal, Vale formed Aliança Geração de Energia SA jointly with a unit of Cemig. Vale plans to hold a 55% stake in the company and Cemig will take the remainder.
The joint venture will comprise Vale and Cemig stakes in six hydroelectric power plants. The said power facilities have a total installed capacity of 1,158 megawatts, the report said.
Vale didn't disclose the value of assets to be included in the venture. Cemig, in a separate statement, said its share of the joint venture is valued at BRL2.03 billion ($874 million). This puts the value of the new company at roughly BRL4.5 billion, WSJ said.
Meanwhile, Cemig paid BRL206 million for nearly half of Vale's 9% stake in Norte Energia SA. Norte Energia is building a hydroelectric dam in the Amazon basin. Indian groups opposed to the giant Belo Monte river dam have occupied the construction site on several occasions in an effort to stop it, the report said.