Sale process of Vale in New Caledonia extended
New Century Resources and Vale have delayed the deadline for closing the sale of the Brazilian miner’s nickel and cobalt operations on the Pacific island of New Caledonia by 45 days. The two parts entered a 60-day exclusivity agreement, back in May, to acquire a 95% stake in Vale Nouvelle Calédonie.
New Century said on Tuesday it had made “significant progress” in evaluating the technical and commercial aspects of the transaction, but has not yet completed a definitive binding agreement.
VNC has proven a financial burden for Vale since it began operations two years behind schedule in 2010. Vale has agreed to contribute up to $500 million of a $900 million working capital funding package as part of a possible divestment of its 95% interest VNC. In addition to the $500-million likely to be funded from Vale, the French State has agreed to contribute a €200-million facility, while New Century would arrange for $1000 million in long term debt and a $100 million contribution.
A purchase price of $1 has also been agreed upon for VNC, along with the assumption of existing shareholder agreement obligation and environmental and supplier agreements, worth an estimated $98-million.
Production at Goro started in 2011, with the processing plant designed to produce up to 57000 t/y of nickel, while the refinery is designed to produce an 80/20 split of nickel oxide and mixed hydroxide product, with cobalt also produced as cobalt carbonate.
The operation is currently undergoing a simplification plan to reduce the complexity by shutting down the refinery and increasing capacity of the mixed hydroxide precipitate (MHP) process. The plan will consist of four key pillars, including limonite-only processing, the exporting of saprolite ore, the decommissioning of the refinery to only produce mixed hydroxide product, and the implementation of dry stack tailings at the mine. Part of the plan has been achieved to date, including the successful refinery shutdown, the ramp-up of MHP production, improvement in overall plant uptime since the refinery shutdown, trial saprolite sale to an on-island customer and a limonite only feed trial planned for August. The shutdown of the refinery and the transition to MHP-only production in the June quarter has put the operation on track to deliver its best monthly production in over two years.
However, the takeover by NCR arouses strong hostility in New Caledonia from Kanak chiefdoms, separatists and unions. Last week, customary rulers in the South called "firmly" on Vale to consider a competing takeover offer from a Caledonian and South Korean consortium. While a second self-determination referendum takes place on October 4, the separatists also defend this option "to regain control of our interests in the mine".
While the mine has the capacity to produce 60.000 t/y of nickel in the form of nickel oxide, it has never performed to full capacity due to design flaws and operational commissioning issues. Last year, Goro churned out just 23.400 tonnes of nickel, slightly over a third of its annual capacity. Antonin Beurrier, CEO of Vale-NC, assured that the industrial complex would be in equilibrium "from 2021" and confirmed the production objectives of 30.000 tonnes of Nickel Hydroxide Cake (NHC) in 2020 and 36.000 tonnes in 2021. He also assured that "social and environmental commitments" would be guaranteed.
“The due diligence process has outlined a logical and technically robust solution for Goro’s operation, which is expected to deliver improved production rates and reduced costs,” New Century said. The Melbourne-based miner noted if the transaction goes through, it would become a major supplier of nickel and cobalt sourced besides the Democratic Republic of Congo. The African country is currently the world’s biggest supplier of cobalt for the EV sector.
The timing of this deal couldn’t be better. Tesla boss Elon Musk recently announced the company was searching for sustainable nickel supply for the batteries that power its electric vehicles (EVs)
Source: https://www.mining.com/new-century-vale-delay-nickel-mine-deal/
https://www.miningweekly.com/article/vale-puts-funding-towards-goro-discard-2020-07-28