CIC leads Vale talks to secure iron ore supplies

Chinese consortium negotiating buying portion of future production for as long as 30 years

China Investment Corp, the $814 billion sovereign fund, is leading an investor group in talks for a multibillion-dollar iron ore supply deal with indebted Brazilian miner Vale SA, people familiar with the matter said.

The Chinese consortium is negotiating the potential purchase of a portion of Vale's future iron ore output for as long as 30 years, two of the people said, asking not to be identified as the information is private.

Vale could fetch about $9 billion in upfront cash from the sale, one person said. No agreements have been reached, and the talks may not result in a transaction.

Some Chinese companies and Japanese trading houses have also held discussions with the Rio de Janeiro-based company about possible deals, including acquiring a minority stake in Brazilian iron-ore assets owned by Vale, the people said.

Vale has joined global miners Freeport-McMoRan Inc, Glencore Plc and Anglo American Plc in selling assets after its net debt swelled to about $27 billion as a commodity rout eroded earnings. Chief Executive Officer Murilo Ferreira raised the prospect of selling some of the company's most prized assets in February, after the miner reported its first year of losses since 1997.

The world's top iron-ore producer has exited coal mines in Australia and is in talks with US fertilizer producer Mosaic Co to sell its South American potash and phosphate assets, which may fetch about $3 billion, people familiar with the matter said. Vale said it wants to raise about $10 billion through next year.

CIC is also part of a group alongside Brookfield Asset Management Inc and Singapore sovereign wealth fund GIC Pte that is close to buying a stake in a Brazilian natural gas pipeline network from state oil company Petrobras for nearly $6 billion, people familiar with the matter said in June.

Vale's Samarco mining joint venture with BHP Billiton Ltd, whose operations were halted last year after a dam spill, is seeking a standstill agreement on about $1.6 billion in bank loans as its owners refuse to cover debt payments until mining resumes, people with knowledge of the matter said this month.