Vale plans to invest $2.6 billion in decarbonization initiatives

Brazilian miner Vale plans to invest up to 13 billion reais ($2.56 billion) in decarbonization initiatives to meet its voluntary emissions reduction targets and mitigate climate-related risks, a sustainability report showed on Monday.

The company did not specify the timeframe for the investment. The amount includes up to 4 billion reais for decarbonizing operations, with 24% invested in the medium term and 76% in the long term.

Another 8 billion reais is linked to building industrial complexes focused on low-carbon technologies, which includes steelmaking transition technologies and iron ore briquette development.

The remaining 1 billion reais would go for research and development, the firm said.

Vale invested 9 billion reais in decarbonization initiatives from 2020 to 2025.

Through these initiatives, Vale sees potential for financial and environmental returns for its business, Grazielle Parenti, executive vice president of sustainability, said in an interview with Reuters.

“Within Vale’s governance framework, all projects and decisions of this caliber are evaluated using an environmental, social, and governance matrix that identifies potential risks and opportunities for each one,” she said.

The company also warned on Monday it could face carbon costs of up to 22 billion reais at present value from carbon pricing mechanisms, with substantial impacts expected from 2030 onwards.

($1 = 5.0686 reais)

(By Marta Nogueira and Fernando Cardoso; Editing by Aurora Ellis)