Failed sale of nickel plant

The planned sale of the Brazilian- owned Vale nickel plant in New Caledonia has failed.

The Australian company New Century Resources said negotiations with various stakeholders could not generate a structure with a suitable risk and reward scenario for shareholders.

Vale in turn said it was considering a shutdown of the plant at Goro, if no lasting solution was found in the coming months.

Restructure

Pro-independence parties and customary leaders had been opposed to the sale after Vale restructured its operation and wanted to sell ore abroad instead of processing it onshore. The governmment of the Southern province, where the plant is located, said it would not allow the plant to shut. It said all efforts would be made to save the 3000 jobs in order to prevent a meltdown of New Caledonia’s economy.

In May, New Century Resources struck a preliminary deal with Vale to buy the asset but was unable to secure the funding in July as planned.

The deadline was extended for another 45 days, but was not met.

Mothball

Three years ago, Vale said it would mothball the plant in the second half of 2018, if there wasn’t a partner prepared to buy a 20 to 40 per cent stake. However, Vale kept the plant open and first put its 95 per cent stake in the plant up for sale in December after running up losses in the hundreds of millions of dollars.

Vale, which acquired the project in the south of the main island when it took over the Canadian miner Inco in 2006, is estimated to have spent $US9 billion (FJ$19b) on the Goro plant.

Demand

Accompanying the was a restructure of tion.

Vale prioritised making NHC, or nickel hydroxide cake, which is in demand for batteries for electric vehicles.

The restructure also included plans to export two million tonnes of nickel ore a year from a deposit available to the plant.

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