Vale May Buy Anglo American’s Brazilian Nickel Unit: Deutsche Bank

Bloomberg reported that according to Deutsche Bank AG (NYSE:DB), Anglo American plc (LSE:AAL) may sell its Brazilian nickel unit to Vale SA (NYSE:VALE).

The firm also said it sees nickel reaching $27,000 per metric ton in 2017. That’s up significantly from its previous prediction of $20,000 per metric ton in 2018.

As quoted in the market news:

Anglo’s Barro Alto unit, which missed its target of an annual capacity of 36,000 tons at the end of 2012 because of setbacks at its two furnaces, said last month it aims to reach the mark by 2016. It plans to fix one of the furnaces this year and the second one in 2015. The mine produced 25,100 tons of nickel last year, Anglo said in February.

“We would suspect that Vale, having undertaken a similar rebuild program at its Onca Puma, could be interested in acquiring the Barro Alto operations and may consider taking on the assets prior to the completion of any refurbishment program if that were to be reflected in the price,” the Deutsche analysts said in the report. “It would also provide Vale with a competitive advantage in tendering and Anglo with a potentially earlier than expected exit.”

Click here to read the full Bloomberg report.