Vale taps Brazil’s free market for natural gas

RIO DE JANEIRO, November 13, 2024 – Brazilian mining giant Vale has signed free-market natural gas supply agreements with Eneva and Origem Energia to power its operations in Espírito Santo, Vale announced on Tuesday.

Unlike the captive market, where customers buy natural gas at a regulated price, the free market allows companies like Vale to negotiate prices directly with suppliers.

Vale is increasing the volumes of natural gas it contracts directly with suppliers in a push to increase its competitiveness. The company aims to source around 90% of the natural gas consumed by its operations in Brazil from the free market by 2025.

Eneva and Origem Energia will supply natural gas until December 2025 to Vale’s Tubarão facility, which accounts for around 60% of the miner’s natural gas consumption. It houses an iron ore briquette plant and six pellet production plants, and Vale expects to bring a second briquette plant into operation at the site at the beginning of 2025.

“We want to strengthen the free natural gas market, whose evolution we consider a great achievement for Brazil’s industrial sector. Our goal is to obtain a reliable supply of natural gas at competitive prices in a more open, dynamic and transparent market,” said Vale’s strategic supplies director Mariana Rosas.

Eneva operates 15 natural gasfields in the Parnaíba and Amazonas basins and is Brazil’s largest private natural gas supplier. Origem Energia is an integrated energy and infrastructure company that operates 14 mature oil and natural gas concessions and 18 exploration blocks in Brazil.

Photo of Parnaíba gas complex courtesy of Eneva

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