Brazilian miner Vale is in talks to increase its stake in Aliança Energia SA, an energy generation and trading joint venture with Companhia Energética de Minas Gerais set up in 2015, according to a report in newspaper Valor Econômico on Tuesday.
Vale is a majority owner in Aliança Energia with a 55% stake, while Cemig, as the Minas Gerais is known, owns 45% of the firm.
Vale has hired Banco Santander to advise it on the potential acquisition, Valor said without providing a source for the information.
In a securities filing on Tuesday, Vale said there is no decision related to raising its stake in Aliança. Still, the company reiterated that it aims to produce 100% of the energy it needs from clean sources through 2030.
Vale added in the filing that it is in discussions with financial advisers to evaluate potential opportunities in line with its energy production strategy, without naming any.
The potential deal underscores Vale’s drive to generate cheap electricity for its mining business and Cemig’s need to raise cash.
Santander and Aliança did not immediately comment. Cemig declined to comment.
Aliança owns seven hydroelectric power plants and one wind power farm in the Northeast of Brazil. According to information on its website, Aliança has 1,257 megawatts of installed capacity.
(By Ana Mano; Editing by Louise Heavens and Bill Berkrot)