Brazil's Vale mulls raising stake in power generation company: paper

FILE PHOTO: The headquarters of of mining company Vale SA is pictured, after the collapse of a tailings dam in an iron mine in Brumadinho in Brazil, in St-Prex, Switzerland January 30, 2019. REUTERS/Denis Balibouse

SAO PAULO (Reuters) - Brazilian miner Vale VALE3.SA is in talks to increase its stake in Aliança Energia SA TAEE11.SA, an energy generation and trading joint venture with Companhia Energética de Minas Gerais CMIG4.SA set up in 2015, according to a report in newspaper Valor Econômico on Tuesday.

Miner Vale is a majority owner in Aliança Energia with a 55% stake while Cemig owns 45% of the firm.

Vale has hired Banco Santander SANB3.SA to advise it on the potential acquisition, Valor said without giving a source for the information.

The potential deal underscores Vale’s drive to generate cheap electricity for its mining business and Cemig’s need to raise cash.

Vale, Santander and Aliança did not comment immediately. Cemig, as the Minas Gerais power company is known, did not immediately reply to a request for comment.

Aliança owns seven hydroelectric power plants and one wind power farm in the Northeast of Brazil. According to information on its website, Aliança has 1,257 MW of installed capacity.

Reporting by Ana Mano, editing by Louise Heavens