Brazil’s state-run oil company Petrobras and mining giant Vale are in talks over a rare earths deal that would allow Vale to replace China as Petrobras’ supplier of lanthanum oxide for oil refining, sources close to the negotiations said.
The deal is part of a series of recent ventures involving Brazil’s two biggest companies, which highlights a major expansion of their previously limited cooperation in mining, oil and logistics.
Vale wants to secure a long-term supply contract from Petrobras for around 900 tonnes of lanthanum oxide a year, one of 17 minerals that are classified as rare earths, which would cut China out of the deal.
China currently supplies Petrobras with the raw material, used as a catalyst in refining crude into gasoline, at about $50,000 a tonne. Vale expects to supply Petrobras with lanthanum for around $20,000 a tonne, sources who did not want to be identified said.
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