Vale New Caledonia or Vale Nouvelle-Calédonie (VNC) will terminate operations in the beginning of 2021 in the absence of a potential buyer after a stake sale deal with Australia’s New Century Resources was aborted in early September.
The mine has a potential of 57,000mt per annum of refined nickel. In 2019, the company produced 23,000mt. New Century declined the offers as Goro mine could never reach its full annual capacity of 57,000mt of nickel. As a result, New Century didn’t find the investment of $200mn worthy.
Vale had previously warned of shutting the plant by the end of October unless a credible buyer emerged. The plant was under care and maintenance mode after New Century called-off the deal.
Recently Vale’s CFO Luciano Siani Pires declared that the plant’s competitiveness is not as expected and should be closed next year as no buyer has been found. Tesla has negotiated with Vale for nickel supplies to be used in electric vehicle (EV) batteries but the nickel will be supplied from Vale’s Canada operations and not New Caledonia.
At a time when demand for nickel is high due to emergence of the EV sector, it is unfortunate that the New Caledonia plant must be shut. Average nickel prices rose 11pc to around $15,671/mt in September, highest this year, but have started to fall since. Nickel prices in October are still up 4pc at $14,728/mt from January.