Vale executives hope to find a partner for the VNC nickel mine in New Caledonia by the end of 2018, company executives said.
Major miner Vale (NYSE:VALE) hopes to find a partner for the VNC nickel mine in New Caledonia by the end of 2018, company executives said in a conference call on Thursday (April 26).
They said the company is not sure if it will continue nickel operations in the French territory if it has no success finding a partner.
The news comes despite Vale reporting in its quarterly results that “VNC registered its best result ever for the second consecutive quarter, with an adjusted EBITDA of US$28 million in Q1 2018, reflecting higher nickel and cobalt prices.”
The results appear to be too little too late for company executives, who said they are not satisfied with nickel prices, but believe the metal will eventually become an industry motor due to its use in the lithium-ion batteries used in electric vehicles.
The VNC site has long been plagued with problems, posting US$1.3 billion in losses from 2014 to 2016. It was over budget and late when it first opened in 2010, immediately coming up against local opposition.
In 2017, the company was reported to be planning to mothball the facility in June 2018 if no progress had been made in its search.
Vale CEO Fabio Schvartsman said at the time, “we cannot continue to invest money and lose money in New Caledonia forever.” The company hopes to sell a stake of 20 to 40 percent to a strategic partner.
New Caledonia is one of the world’s largest nickel suppliers despite its small size, producing 210,000 tonnes of the base metal in 2017. That is equal to the much larger Canada and ahead of mining behemoths Australia, Russia and China.
The closure of VNC would lead to the loss of thousands of jobs, and is opposed by local politicians. On Thursday (April 26), Vale’s share price on the New York Stock Exchange closed at US$14, up 2.34 percent.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.