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Vale 'hopeful' on Positive Outcome for VNC Nickel Plant As Sale Deadline Looms

https://en.steelhome.com [SteelHome] 2020-12-04 15:54:42

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Brazilian miner Vale is "hopeful" that a positive decision will be made within the next two days on the future of its Vale Nouvelle Caledonie (VNC) nickel and cobalt operation in New Caledonia, the company's base metals executive director, Mark Travers said, Dec. 2.

Following Vale's decision to pull out of the the VNC operation, which it announced it would put on care and maintenance in September, Vale on Nov. 4 entered a 30-day exclusivity agreement with global trader Trafigura, the VNC employees and other parties to negotiate a possible sale of the Southwest Pacific operation.

This had followed Vale Canada Ltd (VCL)'s failure to reach a sales agreement with Australian zinc miner New Century Resources Ltd to acquire its 95% stake in VNC.

"We've been working tirelessly since the end of 2019 to exit New Caledonia, we've put a lot of effort into selling the business," Travers said at the Vale Day virtual investors' event.

The arrangement currently being negotiated is "robust" and would involve the operation being taken over by the VNC management team, Trafigura, other shareholders and employees, and needs to meet certain parameters on sustainability and employment, he said.

"It's a rather unique construction," Travers said. "It's a made-in-New-Caledonia solution," he said, explaining the accord would involve a strong participation of around 60% by employees, local shareholders including indigenous tribes and civil society, supporting continued employment of current employees at the plant.

The VNC plant continues operating but mine access is currently blocked amid local protests on the island over its future which are causing Vale "some great difficulties", Travers said.

"We made it very clear we will exit New Caledonia by the end of this year and we are committed to that path," Travers said. "If the accord does not proceed we will proceed along the path of care and maintenance," he said, adding this would cost around $350 million next year. Negotiations would need to take place with the workers' council if care and maintenance proceeds, he said.

VNC has been dogged by environmental protest and refinery issues since its Goro nickel and cobalt mine started up in 2011.

Its processing plant is designed to produce up to 57,000 mt a year of nickel. The on-site refinery was designed to produce an 80/20 split of nickel oxide and a mixed hydroxide product, with cobalt produced as cobalt carbonate and in the mixed hydroxide.

Nickel production at the site last year was 23,400 mt, down from 32,500 mt in 2018.

Source: Platts
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