According to a report by Bloomberg on September 9, a potential buyer failed to reach a deal with Vale SA for an important nickel mine project in New Caledonia; this is so far the nickel mine in New Caledonia The most obvious challenge.
New Century Resources Ltd. (New Century Resources Ltd.) said on September 9 that it could not obtain a suitable financing plan and equity structure from Vale to acquire the Goro nickel project (Goro) in New Caledonia.
The response of Vale also illustrates the problem. The Rio de Janeiro-based mining company stated that it is preparing to suspend the Goro nickel mine project; while studying other options, all of which will "consider the withdrawal of Vale." Although the growing demand for rechargeable batteries as part of the electric vehicle boom has boosted the prospects for nickel, the company made this decision.
Before the nickel mine failed to divest its business, the nickel mine suffered a series of setbacks in terms of finance and operations. The nickel mine was put into production late and the 2010 budget was overrun. In the following years, the Goro Nickel Project has been working hard to increase production capacity.
According to Edward Sterck, an analyst at BMO Capital Markets, “Despite its large resources, the company’s operations are still disappointing, and the design output has never reached the expected level; For the group, it is still a cash drain."
The Goro Nickel Project was acquired by Vale as part of the 2007 acquisition of Canadian International Nickel Industry Company (Inco). This transaction makes it the world's largest producer of nickel ore. However, according to Bloomberg NEF, in 10 years of production, the production capacity of the Goro nickel project has never exceeded 70%, and the capital expenditure has exceeded US$3 billion. This shows the difficulty of using the high pressure acid leach process to produce nickel from laterite deposits.
After two fatal wastewater dam leaks at Vale’s mine in Brazil, the company was also criticized for using similar tailings dam facilities in the Goro nickel project. The acid overflow also interrupted the processing operation.
In May of this year, New Century Resources Ltd. said it was negotiating an agreement. According to the agreement, it will receive the cost of taking over operations. Now that the exclusive period with this Australian company has ended, Vale has begun to hand over the Goro nickel mine project to the maintenance phase. This may be a precursor to discontinuation; unless a solution can be found in the next few months.
Vale said that the company is still discussing the future of the asset with the French government and local authorities, and will make a firm commitment to maintaining the safety of the dam and its social responsibility as it approaches the closure of the mine.
