Bloomberg News

Vale Seeks Partnership With Brazil to Mine Uranium

November 06, 2007

Cia. Vale do Rio Doce is seeking a government partnership to explore for and mine uranium in Brazil, which now has the sixth-largest reserves in the world.

Rio de Janeiro-based Vale is seeking a legal way around the government's monopoly on uranium exploration and use, Tito Martins, director of corporate affairs and energy, said today at a press conference in Sao Jose dos Campos, Brazil.

Growing energy demand in mines, aluminum mills and steel smelters will require Brazil to use more uranium to boost its energy supply, said Vale Chief Executive Officer Roger Agnelli. Brazil is planning to build as many as eight nuclear power plants by 2030, the Energy Ministry announced earlier this year.

``Thermal energy from uranium is the future,'' Agnelli said at the news conference today. ``This is an inevitable trend.''

Brazil's constitution gives the government a monopoly to explore, process and sell all nuclear metals. BHP Billiton Ltd., Yamana Gold Inc. and Vale, which already explores for uranium in Canada and Australia, asked Congress in September to change the rules to allow private investment in uranium mines.

Overturning the ban on private participation in uranium production would help Brazil boost its reserves to third-largest in the world from sixth, Paulo Camillo Penna, president of the Brazilian Mining Association, said at the time.

Vale, the world's largest iron-ore mining company, and the BNDES state development bank plan to build a center in Sao Jose dos Campos to research energy projects. The initial investment in the center is 220 million reais ($126.7 million), Vale said today in a statement.

Vale also said it will spend $197 million on energy projects this year and $470 million in 2008. Most of the money will go to a hydroelectric dam and a thermoelectric plant, Martins said.

To contact the reporter on this story: Carlos Caminada in Sao Paulo at at ccaminada1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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