News sources reported Monday that Vale has agreed to the formation of joint venture with power producer Cemig Geracao e Transmissao, part of the company’s cost-cutting efforts. The new JV, which will involve Cemig’s stake in six hydroelectric power plants with a total installed capacity of 1,158MW, will be called Aliança Geração de Energia S/A, with Vale assuming a 55 percent interest.
While Vale has not disclosed its financial obligation in the JV, Cemig announced in a separate statement that its participation is valued at 2.03 billion reais (US$874 million).