Vale (NYSE: VALE), the world’s top producer of nickel and
iron ore, has received non-binding offers for its operations on the Pacific
island of New Caledonia, it said in a conference call on Wednesday.
The Brazilian mining giant said it expected to have “relevant
news” on the topic within a month or two.
Vale said in December it was putting its nickel assets in New Caledonia on the block. The decision came after it had to write down $1.6 billion in the fourth quarter related to the ailing mines, the world’s biggest nickel operations.
The announcement came less than a year after it had unveiled plans to invest $500 million in the nickel mine after failing to find a partner for the operation.
Last week Vale axed its 2020 production forecast for the metal to 180,000 to 195,000 tonnes from 200,000 to 210,000 tonnes, excluding its unit in New Caledonia.
“Vale’s cut to production has supported the [nickel] market,
but mines closing production is not too new as we knew some mines would shut,”
said Commerzbank analyst, Daniel Briesemann. “The negative impact of the virus
is more severe for the demand side, and the market could be well oversupplied
this year.”
More to come…