Nickel: Vale in new exclusive negotiations over VNC sale

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Brazilian group Vale has announced that it has entered into exclusive negotiations with a consortium that includes trading company Trafigura, with a view to selling its Vale Nouvelle Calédonie (VNC) plant. The consortium will be 50% owned by New Caledonian interests including management and staff, as well as New Caledonian provinces. In addition, Trafigura will own a 25% share, with the remaining 25% held by an investment company.

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This announcement is yet another development in Vale’s long-running effort to divest the VNC operation. The company had previously planned to sell the plant in 2017, although these efforts came to nothing. At the end of 2019, Vale tried again, although along with the announcement of a renewed sales push came a re-organisation of the operation that included the closure of the nickel oxide refinery, leaving the plant to focus exclusively on nickel-cobalt intermediate products targeting demand from the battery industry.

Roskill understands from reports in the New Caledonian press that the current exclusivity period between Vale and the consortium, called Prony Resources New Caledonia, runs until 4 December and that the parties aim to close the transaction in January 2021. It has also been reported that in order to facilitate the sale, Vale is offering to buy part of the plant’s production for several years.

Roskill published the second update to its Nickel: Outlook to 2029, 16th Edition report in October and will publish the second update to its Nickel Sulphate: Outlook to 2029, 3rd Edition report this month. These updates provide analysis of the latest developments in supply, demand, market balance and prices amid changes to the global macroeconomic climate. Click here for more information on Roskill’s full range of reports.

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This article was written by Olivier Masson. Please get in touch below if you wish to discuss further:

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