Saudi Arabia’s Public Investment Fund is emerging as the leading bidder to acquire a stake in Vale SA’s multibillion-dollar nickel and copper operations, people with knowledge of the matter said.

PIF is in advanced discussions with the Brazilian miner about a deal for a roughly 10% holding in its base metals unit, according to the people, who asked not to be identified discussing confidential information. The stake could be valued at around $2.5 billion, they said.

The wealth fund is poised to beat out rival bidders including Japanese trading house Mitsui & Co. and the Qatar Investment Authority, the people said. It may take at least several weeks to hash out a formal agreement, the people said.

PIF may do the Vale deal through a joint venture it set up in January with Saudi Arabian state miner Maaden. The JV, established to take minority stakes in iron ore, copper, nickel and lithium businesses, is part of Saudi Arabia’s efforts to diversify its economy from oil and secure access to strategic minerals.

Deliberations are ongoing, and talks could fall apart or another buyer could emerge. Spokespeople for PIF and Maaden didn’t immediately provide comment or couldn’t be reached. Representatives for Mitsui, Vale and QIA declined to comment.

Vale last year hired advisers to assess options for the business, amid soaring demand for metals like copper and nickel that are key to the global push to cleaner forms of energy. Vale operates nickel and copper mines in countries including Brazil, Canada and Indonesia.

--With assistance from Mariana Durao, Vinícius Andrade, Archie Hunter, Jacob Lorinc, Thomas Biesheuvel, Grace Huang and Matthew Martin.

Author: Dinesh Nair, Aaron Kirchfeld, Vinicy Chan and Cristiane Lucchesi