Vale has hired investment banks Barclays PLC and Standard Chartered to sell its metallurgical and thermal coal mining and port projects in Mozambique, three sources said on Thursday, according to Reuters.
Vale aims to be carbon neutral by 2050.
Vale joins companies such as BHP Billiton, the largest miner, in wanting to move away from coal-fired power generation as global investors dump dirty fossil fuels.
Vale, the world's second-largest iron ore producer, agreed on Thursday to buy its minority stake in Mozambique's Moatize coal mine and Nacala corridor rail and port project ahead of a planned sale.
It is not clear how much the assets might fetch, the sources said.
The sources declined to be named because the discussions are confidential.
Vale, Barclays and Standard Chartered declined to comment.
In 2019, due to technical and operational issues, Vale significantly reduced the value of these assets.
The company's coal division reported a $213m loss in adjusted earnings before interest, tax, depreciation and amortisation in its most recent quarterly results.
Vale expects production to reach 15m tonnes in the second half of this year and 18m by 2022.
Vale and its advisers are expected to target companies in India and China, including China Minmetals Corp, a state-backed metals trader, as well as India's JSW Steel Ltd. and state-owned Steel Authority of India Ltd.
China produces and consumes about half of the world's coal and plans to allow more provinces to start building coal-fired power plants from 2023.
A diplomatic dispute has led to a de facto ban on imports of Australian coal, meaning China is eager to find other sources of imports, one source said.
India is the world's second-largest importer of coal after China.
