Gold as By-Product: Why Sossego and Salobo Matter

Two of Brazil's ten largest gold-producing mines are not gold mines at

all. Sossego and Salobo in Pará are primarily copper operations that

deliver gold as a by-product — together accounting for more than 8

percent of the country's annual output. Their economics, and what they

reveal about Brazilian gold supply, deserve closer attention.¹²

The Carajás Numbers

Vale's Sossego mine contributed 4.2 percent of Brazilian gold production

in 2025 and the Salobo operation contributed 3.9 percent, according to

the sector review published by Revista Minérios.¹ Combined, the two

open-pit copper mines delivered roughly 8.1 percent of national gold

supply — more than any single Brazilian primary gold mine except

Paracatu and Jacobina.

Both sit inside the Carajás Mineral Province in southern Pará, the same

region where Vale operates iron-ore mines that dominate its corporate

identity. The gold output of Sossego and Salobo barely moves the needle

on Vale's overall revenue. On a Brazilian gold-supply basis, however,

the two operations punch well above their weight.

How By-Product Economics Work

By-product gold economics are different from primary gold economics in

ways that matter for investors. In a primary gold mine the capital,

operating costs and production decisions are all calibrated to the gold

price. At US$4,000 per ounce the mine makes more money; at US$2,000 it

makes less. The pit plan may even change with the price: lower-grade

material comes in or goes out of the economic envelope.

In a by-product operation the primary-metal economics dominate. Vale

runs Sossego and Salobo because copper at US$8,000-10,000 per tonne

makes them economic. The gold recovered from the concentrate is treated

as a credit against copper costs — it reduces the effective all-in

sustaining cost of producing copper. The mine operates regardless of

whether gold is at US$1,800 or US$4,500, because the copper economics

anchor the decision.

This produces a supply-side insensitivity that the market sometimes

forgets. A 40 percent move in the gold price does not significantly

change output at Sossego or Salobo. It changes the revenue mix — gold

contributes more, copper a slightly smaller share — but the tonnes of

ore moved, the recovery circuits, and the mine schedules are all

governed by copper.

For Vale's investor narrative the gold credit has become more visible

over the past two years. At 2025 average prices the precious-metal

contribution to the Carajás copper segment was material enough to appear

explicitly in analyst models, and several equity research houses have

started treating Vale's base-metals division as partially a

precious-metals story. That shift in perception is a useful byproduct of

the byproduct story itself.

Operational Stability Through the Cycle

For the Brazilian national supply picture, by-product gold is therefore

a stabiliser. When gold prices fall, primary gold mines can cut back,

defer capital or enter care-and-maintenance. Sossego and Salobo keep

producing. When gold prices rise, primary producers can lift output, but

the incremental ounces from by-product operations are marginal.

The 2025 data illustrate the point. Australian gold production dropped

54 percent year-on-year because several primary operations went on

care-and-maintenance on cost pressures.³ Brazilian by-product gold

output from the Carajás copper block was essentially unchanged. The

smooth base that Sossego and Salobo provide is part of why Brazil's

aggregate production profile is remarkably steady through gold-price

volatility.

Sossego and Salobo Specifically

Sossego has been producing since 2004 as one of Vale's earlier copper

operations in Carajás. It processes a porphyry-style copper-gold ore and

recovers both metals in a conventional flotation-and-leach circuit.

Grades are moderate on the copper side and respectable on the gold side,

which is why the operation consistently punches above its weight in the

national gold ranking.

Salobo, commissioned in 2012 and expanded since, is larger. Vale has

reinvested periodically in processing capacity, and the mine is one of

the company's main copper growth contributors. The gold recovered is

monetised through a long-standing streaming arrangement that predates

Vale's recent copper strategy review, and the ounces flow out of the

operation via that specialised channel rather than through a standard

LBMA refinery path.

Both operations have mine lives measured in decades rather than years.

The Carajás Mineral Province's geological endowment is unusually deep,

and Vale's published reserves for the two assets extend the horizon well

beyond 2040.

The Strategic Implication for Brazil

The USGS notes that roughly 7 percent of U.S. gold production is

recovered as a by-product of domestic base-metal ores, chiefly copper.²

Brazil's ratio is likely similar or slightly higher on the national

basis, with Sossego and Salobo the dominant contributors and a handful

of smaller operations adding at the margins.

Strategically, this has two implications. First, Brazil's gold supply is

less exposed to gold-price cycles than a supply profile dominated by

primary mines would be. Second, the trajectory of Brazilian gold output

will track the trajectory of Brazilian copper output as much as the gold

price itself. If Vale and other operators commission additional copper

capacity in Carajás through the late 2020s — which the company's

published guidance suggests they will — then Brazilian gold output has a

structural tailwind from the same investment stream.

The Brazilian Geological Survey's favourability map for copper-gold

deposits along the Carajás-Tapajós-Alta Floresta axis reinforces the

point.⁴ New copper-gold discoveries along that axis will deliver gold as

a by-product by definition, and the country's next generation of

base-metal mines will quietly add to its precious-metals output.

Outlook

Gold investors who overlook by-product supply