Vale announced Monday that it plans to sell as much as 407 million shares (an approximate 22 percent stake) of Oslo, Norway-based aluminum producer Norsk Hydro ASA in order to cut costs and boost profits. Norsk Hydro is valued at about US$1.8 billion.

In a regulatory filing, the company indicated that in addition to those shares, it will offer up to 40.7 million additional shares via an over-allotment option.

According to local repots, Vale is selling assets, putting projects on hold and focusing on its more profitable iron-ore business in an effort to recover profit margins after commodity prices fell. In September, it sold stakes in a cargo unit for about 2.7 billion reais (US$1.2 billion) to Japan's Mitsui & Co. and a Brazilian government fund after $1.47 billion of asset sales last year, including a coal mine in Colombia and 10 large vessels.

Vale acquired the 22 percent stake after selling its bauxite and alumina assets in Brazil to Norsk Hydro for $5.27 billion in 2011.