Brazilian miner Vale has been contemplating shutting down its nickel and cobalt operation in New Caledonia following a loss in competitiveness it experienced at the site over the past year.
Vale’s New Caledonia site has capacity to produce 57,000mt of nickel annually. In 2019, the miner produced 23,400mt of the metal, down 28pc from 32,500mt a year prior. The group has been unable to reach an agreement thus far despite frequent negotiations. Vale put the mine under care and maintenance in September, ahead of a complete shutdown, after New Century Resources backed out from the transaction.
Vale’s most recent proposal entails selling the nickel plant to a group led by Trafigura, a Swiss-based commodity trader. According to media reports, the sale will give Trafigura a 38pc stake in the mine. This plan has triggered a rally, set to be held in New Caledonia on Friday, intended to demonstrate opposition to the sale. These groups assert that nickel ore mine in the island should be processed domestically, rather than exported.
The nickel project has 35 mines and three processing plants, accounting for around 20pc of employment in New Caledonia. The territory is the fourth largest producer of nickel ore and the seventh largest nickel producer globally. in 2019, Vale produced 208,000mt of nickel, making it the leader in this segment.