Brazil's Vale, Cemig Form JV For Energy Assets: Reports

(RTTNews) - According to media reports, Brazilian mining giant Vale S.A. (VALE) has agreed to establish a joint venture with an unit of power company Cemig (CIG, CMIG4.BR) to manage some energy assets and to dispose a portion of its stake in the controversial Belo Monte hydroelectric dam in the Amazon forest, as part of the mining company's efforts to slash costs and focus on its main business.

Reports added that Vale would form a company called Aliança Geração de Energia S/A jointly with Cemig Geracao e Transmissao SA, a subsidiary of Cemig, with Vale assuming a 55% shareholding in the new company and Cemig controlling the remainder. The venture is expected to include Vale and Cemig stakes in six hydroelectric power plants, with a total installed capacity of 1,158 megawatts.

Vale did not announce the potential value of the assets to be included in the new firm, but Cemig reportedly announced that its 45% stake is worth 2.03 billion Brazilian reais, or $874 million.