Vale Backs Patria Reforestation Fund for Carbon

Vale has become an investor in the Reflorest Fund, a reforestation vehicle created by asset manager Pátria Investimentos. In exchange, the Brazilian mining company will gain access to carbon credits generated by the fund's environmental restoration projects.

The transaction details, including the size of Vale's capital contribution and the expected volume of carbon credits, were not disclosed. Vale stated that the move supports its climate strategy and its goal to protect and restore 500,000 hectares of forests and natural areas by 2030.

Patria aims to raise R$ 2 billion for the Reflorest Fund to restore degraded land in the Atlantic Forest using agroforestry systems. The fund targets annual returns of up to 12% in US dollars over a 15-year horizon, relying on carbon credits, timber sales, and agricultural products. Silicon Valley startup Pachama brought the transaction to Patria and assists with carbon credit origination.

The fund initially raised R$ 160 million, including R$ 50 million from São Paulo state development agency Desenvolve SP. Patria has already acquired two farms in São Paulo state to restore 1,000 hectares with a planned investment of R$ 50 million, and the vehicle may receive up to R$ 500 million from development bank arm BNDESPar.