Vale receives non-binding offers for New Caledonia assets
RIO DE JANEIRO – Brazilian iron-ore miner Vale has received non-binding offers for its nickel mining operations on the Pacific island of New Caledonia, an executive said in a call with analysts on Wednesday.
On the call, Vale base metals chief Mark Travers said the company received the offers in late February. While the full economic effects of the coronavirus pandemic were not felt until March, he said negotiations were still progressing successfully with potential buyers. Vale expects to have relevant news on a potential deal within a month or two, he added.
The company announced in December it was putting its nickel assets in New Caledonia on the block, after a $1.6-billion writedown in November related to the operation, which has faced technical setbacks, a chemical spill and violent protests.
A previous effort to sell a stake in the venture was unsuccessful.
Executives also disclosed on the call that they plan to reopen the Timbopeba mine in the Brazilian state of Minas Gerais next week, which will produce about 330 000 t of iron-ore fines per month.
Timbopeba is part of the Mariana complex, where a tailings dam co-owned by Vale and BHP Group burst in 2015, causing widespread environmental damage. Minas Gerais state is also the site of the Brumadinho disaster, where a Vale-owned tailings dam burst in 2019, killing over 270 people.
On Tuesday night, Vale posted a first quarter profit of $239 million and cut its 2020 capital expenditure forecast, as the coronavirus pandemic hinders some operations. Brazil-listed common shares in Vale were up 4.6% in early afternoon trading.
Brazil's benchmark Bovespa equities index was up 1.6%.
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