Pricing the factory of the South, owned by Vale, and the Goro Nickel Mine  

Image Source: New Caledonia Vale

Image Source: New Caledonia Vale

The Brazilian miner faces new losses and the Covid-19 pandemic has impacted its results and production in Brazil. The multinational has come to terms with the idea that it needs to carve out its least profitable asset: its New Caledonia plant with its nickel and cobalt mine, it has lowered its asking price by 400 million dollars in order to be market competitive. The value of the factory and mine is said to be between 204 and 400 million dollars. 

The southern factory has accumulated budget overruns and years of delay before starting up in 2010. Vale is said to have invested more than $6 billion in the Caledonian site, some sources say $9 billion. Goro's large nickel and cobalt mine and the factory in the South are benefiting from an industrial recovery plan which is starting to bear fruit: 100 tonnes of nickel and cobalt intended for the electric vehicle industry are now produced each month and this should further increase in the months/years to come. The cost of production of Vale-NC also fell sharply, approaching the price of nickel on the London Metal Exchange. The future looks bright if the right management comes in place. 

Friday closing price of the Nickel at the London LME: $ 13,070 per tonne.

 

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