Roskill reports that Vale has elected to support its VNC New Caledonia plant thanks to the prospects from the electric vehicle (EV) market. The company, which had previously been looking for an investment partner to plough additional funds into the plant, will now be investing the required funds itself – up to $500 million according to media reports. Vale estimates that growth in the EV market will lead to a 500,000 t rise in demand for high-quality nickel by 2025. As a result, the company will now be looking to revise its mine plan at the site, as well as launching a debottlenecking study, with a view to ramping up production to 50,000 t/y in the medium term (Roskill estimates current capacity at 42,000 t/y). VNC produces nickel oxide and nickel hydroxide cake.

Roskill view: “The VNC plant started up late and over budget, a pattern that was repeated at other high-pressure acid leach-type nickel plants. Having previously said that it was looking for a partner to invest additional funds into the plant, Vale has now made an about-face and decided to go it alone. The company’s decision to invest additional funds into the plant is justified by the demand prospects for high-quality nickel by the EV market. With the nickel market now in a structural deficit, investment in plants that can process nickel ores into suitable material for the battery sector is expected to increase. Similarly, exploration activity for suitable ore bodies will also have to increase. As a result of this, Vale announced that it had reached an agreement with Glencore to jointly develop its own Victor deposit and Glencore’s Nickel Rim South, both in Canada.”