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Vale announces offer to buy Brazilian copper producer

Vale has announced that it will offer to buy Brazilian copper producer Paranapanema S.A for BRL2,010.82M.
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The offer will be subject to the purchase of at least 50% plus one common share of Paranapanema being tendered into the offer.

“If the offer is successful, Vale intends to conduct studies that could result in corporate and/ or asset reorganisation,” Vale said in a statement.

Paranapanema is one of Brazil’s biggest producers of refined copper. Its assets include a copper smelter/ refinery and three production plants of downstream copper products. It also has a 99.09% stake in Cibrafértil, which operates a phosphate fertiliser plant.

Vale says that one of its strategic objectives is to become, in the medium term, one of the main copper producers in the world.

Currently, Vale has a production capacity of 300,000 tpa, from Sossego mine, in Carajás, located in the state of Pará, and from the production of copper as a nickel by-product in the Canadian sites of Sudbury and Voisey Bay.

It is developing two copper projects, Salobo, in Carajás, with production capacity of 100,000 tpa, and Três Valles, in Chile, with production capacity of 18,000 tpa, with start-ups in 2011 and 2010, respectively.

The Konkola North project, in Zambia, with capacity of 40,000 tpa, will start this year. In addition, Vale has many others growth options for its copper production, such as future Salobo brownfield expansions (Salobo II e III) and the development of projects currently in less advanced stages as Cristalino, Alemão, Pólo and 118 projects, all of them in Carajás.

The Paranapanema acquisition is consistent with its strategic objectives of accelerating the growth of copper production and has a significant potential for value creation to its shareholders, the firm said.

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