Brazil Investors Push for Canada Mines

The announcements of two high-profile mining investments by Brazilian companies in Canada show that some resource investors are undeterred by the Canadian government's recent rebuff of Anglo-Australian miner BHP Billiton's bid for Potash Corp. of Saskatchewan.

Mining giant Vale S.A., of Rio de Janeiro, said Wednesday it will make 10 billion Canadian dollars （$9.78 billion） in investments in Canada over the next five years, potentially including a new potash mine in Saskatchewan. Brazil's EBX Group also said it made a C$1.2 billion cash offer to buy Ventana Gold Corp., a Vancouver-based miner with a gold deposit in Colombia.

"Canada…is as important as Brazil is for Vale today," Tito Martins, chief executive of Vale's Canada's operations, said in an interview. Vale, which bought Canadian nickel-mining heavyweight Inco in 2006, for the past two years has run global operations for base metals including nickel, copper and aluminum from Toronto, Mr. Martins said.

The Vale and EBX announcements show how attractive Canada's resource firms and assets remain, despite the government's rejection of BHP's $38.6 billion hostile bid for Potash. Canadian regulators decided the proposed takeover of the world's biggest potash producer wouldn't benefit the country, amid popular sentiment that the key crop nutrient was strategically important. BHP dropped its bid earlier this week. Critics warned the episode could chill potential resource deals—and general foreign investment in Canada.

Mr. Martins said he hasn't perceived such a chill, and that Vale's operations and investment plans in Canada are unaffected by the government's decision to reject BHP. He pointed out that the investments announced Wednesday are for upgrades, exploration and development for new mines rather than purchases of existing companies that require government approval. Vale said it's evaluating up to C$3 billion in investment in a potash mine in Saskatchewan, as well as C$1 billion in new investments in mine exploration in Manitoba.

The remainder of Vale's C$10 billion investment plan is a mix of plans already in the works, most substantially an overhaul of its Canadian nickel smelting and refining business in order to meet the country's environmental regulations cutting sulfur dioxide emissions by 2015.

Canada's decision to reject the BHP bid "might affect" decisions on future Canadian acquisitions, Mr. Martins said, adding that Vale has no such plans.

The BHP rejection didn't deter EBX, an investment holding company for Brazilian billionaire Eike Batista, which said it was offering C$1.2 billion to take over the 80% of Ventana Gold that it doesn't already own. Richard Warke, Ventana's founder and chairman, said the board "will be taking a series of steps to evaluate the offer" and will give further guidance to shareholders when it has completed its review.