Vale speeds Salobo copper expansion, cuts costs

Vale’s (NYSE: VALE) Base Metals (VBM) unit is adding about 30,000 tonnes of annual production at its Salobo mine, Brazil’s largest copper operation, after cutting capital costs and accelerating first production by about a year.

The coarse particle flotation (CPF) expansion is expected to lift Salobo’s total throughput by 6 million tonnes to 42 million tonnes a year and include about 15,000 oz. of gold byproduct. Vale cut the project’s estimated capital cost to about $215 million from an earlier range of $225-$275 million, while Wheaton Precious Metals (TSX, NYSE: WPM) will contribute $40 million under an amended streaming agreement. First production is targeted for the first half of 2028.

“This project will allow us to produce more copper, more efficiently, using existing infrastructure while improving environmental performance,” Vale Base Metals CEO Shaun Usmar said in a release. He highlighted the company’s “ability to unlock significant value and growth from world-class assets through execution, innovation and astute capital allocation.”

The investment marks another step in Vale’s strategy to nearly double annual copper output to about 700,000 tonnes by 2035 through a pipeline of brownfield expansions in Brazil’s Carajás region. Salobo, which posted record output in 2024 and 2025, is the second project in the pipeline to be accelerated in recent weeks after Vale brought forward first production at the nearby Bacaba project by about six months to the third quarter of 2027.

Higher recoveries

CPF is designed to remove waste rock earlier in the processing stream through an additional flotation circuit, reducing grinding requirements while increasing metallurgical recoveries and plant throughput. Vale said the process is also expected to lower average energy and water consumption compared with conventional processing methods.

The company received the construction licence for the project from Brazil’s environmental regulator ahead of schedule, allowing construction to begin earlier than planned. Vale estimates the project will generate an after-tax internal rate of return of more than 50%, with its net capital commitment reduced to about $175 million after Wheaton’s contribution.

The accelerated timetable contrasts with recent challenges in Vale’s base-metals business. After years of inconsistent copper output, the company posted its highest production since 2018 in 2025, helped by record performance at Salobo and improved reliability across its Brazilian operations.

The expansion comes as miners face mounting pressures bringing new copper mines into production amid rising costs, permitting delays and increasingly complex deposits. Rather than relying on greenfield developments, Vale is betting that brownfield expansions around its existing Carajás operations can deliver faster, lower-risk production growth.

The company already controls the resource base and infrastructure needed to grow existing operations rather than build costly new mines, CEO Gustavo Pimenta said in March.

Wheaton

The new project’s funding agreement replaces potential future milestone payments under the existing Salobo precious-metals streaming agreement.

Wheaton will make two $20-million payments tied to project milestones and, in return, will benefit from the additional gold byproduct expected from the expansion.

“Salobo has been a cornerstone asset for Wheaton for many years, and we are pleased to support the advancement of the CPF project,” Wheaton president and CEO Haytham Hodaly said in the same release.

“It reflects our commitment to investing alongside high-quality partners in opportunities that generate long-term value for both parties.”

Vale shares declined 0.4% on Thursday morning in New York to $13.96 apiece, valuing the company at $62.5 billion. Wheaton Precious Metal stock fell 1.4% to C$185.29 each in Toronto for a market capitalization of about C$84 billion (US$60 billion).