SAO PAULO - Brazilian miner Vale said on Thursday it reached two separate agreements to sell a 13% stake in its base metals business for $3.4 billion, aiming to boost its copper and nickel output.

The sale is part of Vale's strategy to unlock more value from its nickel and copper assets, given expectations for soaring demand for the metals from the electric vehicle market.

A joint venture formed by Saudi Arabian Mining Co (Ma'aden) and the country's Public Investment Fund (PIF) will acquire 10% of Vale's base metal unit, while U.S. investment firm Engine No. 1 will acquire 3%.

The cash deal expected to close by the first quarter of 2024 values the company's base metals unit at an enterprise value of $26 billion, it said. Vale's market capitalization in the Brazilian stock exchange was $67.4 billion, based on Thursday's closing price.

"With our high-quality portfolio, we are uniquely positioned to meet the growing demand for green metals essential for the global energy transition," Vale's CEO Eduardo Bartolomeo said in a statement.

It follows a plunge in the miner's profits in the second-quarter, posted separately on Thursday, which fell 78.2% from the previous year, dragged down by lower iron ore prices.

Vale's core business is iron ore production and distribution, but its base metals unit also produces copper and nickel at mines in Brazil, Canada and Indonesia.

With its new partners, Vale aims to invest between $25 billion to $30 billion in strategic mineral projects over the next decade, it said.

This would enable a "significant potential increase in our copper production" to about 900,000 metric tons per year, from 350,000 tons, it said. Nickel output would grow to more than 300,000 metric tons per year, from the current 175,000 tons. Vale has previously signed contracts to supply nickel to major automakers including Tesla and General Motors .

($1 = 4.7430 reais)

(Reporting by Peter Frontini; Editing by Isabel Woodford, Brendan O'Boyle, Deepa Babington and Jamie Freed)