(Bloomberg) -- Cosan SA, the conglomerate controlled by Brazilian billionaire Rubens Ometto, is amping up its mining bet, becoming a key minority shareholder in the world’s second-largest iron-ore producer.
Cosan, which has operations ranging from fuel to logistics, scooped up about 5% of Vale SA’s voting stock and is seeking permission from Brazil’s antitrust watchdog to boost the stake to as much as 6.5%, according to a company statement. All told, it would mean purchasing about 23 billion reais ($4.4 billion) in Vale stock based on current prices.
With the stake purchase, Cosan might reap potential synergies with its logistics network. The company has been boosting investments in railways and last year acquired the operator of a port terminal located in Brazil’s northeastern Maranhao state. A Cosan subsidiary also agreed to form a joint venture focused on mining and logistics named JV Mineracao.
Cosan, which was founded by Ometto, operates one of the world’s largest sugarcane processors. The Brazilian conglomerate also has diversified operations in the energy sector, with companies specialized in ethanol, electricity and the distribution of fuel, natural gas and lubricants. The portfolio includes a joint venture with Shell PLC, energy company Raizen SA. The Omettos own a 36% stake in Cosan, worth about $2.3 billion.
Cosan joins Mitsui & Co Ltd, BlackRock Inc., Capital Group and Previ -- the pension fund for workers of state-owned Banco do Brasil SA -- as Vale’s biggest individual shareholders.
Shares of Vale rose as much as 5.1% before erasing gains in Sao Paulo Friday, extending a weekly advance. Earlier this week, the Brazilian miner said it hired advisers to assess options for its base-metals unit. Cosan extended losses on the back of the news, plunging as much as 9.4%.
Vale didn’t immediately reply to an emailed request seeking comment.
©2022 Bloomberg L.P.