Vale creates venture capital arm to boost mining innovation

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The Brazilian mining giant is dedicating $100 million to investing in startups around the world.

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(Bloomberg) – Vale SA, the world’s second-largest producer of iron ore and one of the largest suppliers of nickel, has created a venture capital arm to support startups focused on developing breakthrough innovations for the challenges of mining and metals.

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Vale Ventures starts with a $100 million budget to invest in companies involved in sustainable mining initiatives. The unit seeks to provide seed funding and seed investments in startups around the world, with the aim of holding 3% to 5% stakes in the companies.

“We will be part of a pool of investors working for the success of these startups,” Viktor Moszkowicz, director of Vale Ventures, said in an interview.

Vale’s spending will be enough to build an initial portfolio of investments in about five years, generating a financial and strategic return, he said. The first in Vale’s portfolio is Boston Metal, a company focused on steel decarbonization technology that is backed by cleantech venture capital funds, mining companies and steel users. Vale invested $6 million in the US company in September.

Vale’s venture capital push follows similar moves by rivals including BHP Group Ltd. and Rio Tinto Group. The Brazilian mining giant is seeking access to business opportunities and innovative technologies that can be used in its operations as part of an effort to meet its environmental goals.

The Rio de Janeiro-based company has four main themes guiding Vale Ventures’ portfolio selection: decarbonization, waste-free mining, technology that changes mining operations, and energy transition metals.

The final theme aims to stimulate supply and demand for the key metals needed to support the shift from fossil fuels to cleaner energy. Startups that develop batteries that use metals produced by Vale are on the radar, as is technology that creates “urban mines” — places where discarded metals can be recycled, Moszkowicz said.

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