The massive Brazilian mining firm Vale has announced a deal to sell a 35.9 percent stake in its cargo logistics firm and invest billions in better infrastructure.

The world's top iron ore producer said in a statement the transaction of its VLI logistics department, valued at $1.232 billion, calls for the offloading of a 20 per cent stake to Mitsui for $678 million and 15.9 per cent to the Caixa Economica Federal for $543 million.

Vale, which controls VLI, said it was also in talks to sell another 26 per cent stake in the company to a consortium led by Brookfield Brasil, a subsidiary of the Canadian firm Brookfield.

Vale President Murilo Ferreira further announced his company would invest over $4.1 billion in VLI over the next five years to overhaul its ports, terminals and more than 10,000 kilometres of railroads in Brazil.

Ferreira made his announcement after meeting with Brazilian President Dilma Rousseff, the presidential office said.

“Vale is selling assets, suspending projects and focusing on more profitable iron ore activities in a bid to regain profit margins in the face of slumping commodity prices,” according to the consulting firm Seeking Alpha.