Vale completes sale of New Caledonia nickel operation
France, which controls the Pacific territory of New Caledonia, will offer nearly 500 million euros (FJ$1.23 billion) in support through loans, guarantees and tax breaks, the French economy ministry said.
Brazilian miner Vale SA VALE3.SA has concluded the sale of its New Caledonia nickel mining assets to a consortium including commodity trader Trafigura, the companies said, opening the way for a production restart at the site hit by political unrest.
Vale’s decision last year to sell the nickel mine and processing plant to the consortium featuring Trafigura sparked fierce opposition from pro-independence groups, with violent protests leading to the shutdown of the site in December.
However, an agreement in early March by New Caledonian political leaders on revised terms for the sale, including a majority stakeholding for local interests, helped ease tension and clear the way.
Vale said in a filing that US$1.1 billion (FJ$2,22 billion) will be invested in the assets, with US$555 million (around FJ$1.15 billion) coming from its subsidiary Vale Canada Ltd., and that Vale will have a supply contract to offtake part of the nickel produced.
France, which controls the Pacific territory of New Caledonia, will offer nearly 500 million euros (FJ$1.23 billion) in support through loans, guarantees and tax breaks, the French economy ministry said.
The consortium, called Prony Resources New Caledonia, would invest US$100 million (FJ$206.65), of which US$50 million (FJ$ 103.33) from Trafigura, the ministry added.
The restart of nickel production is expected in mid-April after operations at the site resumed last week, the consortium said in a separate statement.
The consortium also confirmed a separate agreement on a “technical and industrial partnership” with electric car maker Tesla, previously announced by New Caledonia’s political groups.
The parties said the sale agreement would allow former Vale site to tap into growing demand for nickel, traditionally used in stainless steel, for electric vehicle batteries, while also reinforcing environmental standards.
Under the consortium, New Caledonia’s provincial authorities and other local interests will have a 51 per cent stake, Trafigura 19 per cent and a joint venture between management and investment Agio Global the remaining 30 per cent.
New Caledonia is the world’s fourth-largest nickel producer.