Vale confirms that its Vale Canada Limited subsidiary has concluded the sale of its ownership interest in Vale Nouvelle-Calédonie SAS (VNC) to the Prony Resources New Caledonia consortium.
The consortium of investors, including Trafigura, comprises a majority and non-dilutable shareholding for New Caledonian interests, Vale said.
Eduardo Bartolomeo, CEO of Vale, said: “After several months of negotiations, I am pleased that we concluded our divestment of VNC, benefitting employees, New Caledonia and all its stakeholders. Vale is fully committed to this transaction. It meets the guarantees required at the financial, social and environmental levels and offers a sustainable future for the operations.”
Vale’s intent from the beginning of the divestment process was to withdraw from New Caledonia in an orderly and responsible manner, with the company saying the deal accomplishes that.
Vale previously tried to sell the operations to Australia-based New Century Resources, but the two parties failed to reach an agreement.
The deal provides the former VNC operations with a financial package totaling $1.1 billion, of which Vale Canada Limited is contributing $555 million to support the continuity of the operations. The financing of the “Pact for the Sustainable Development of the Deep South” will also be secured by Vale, it said.
The Pact for Sustainable Development of the Deep South was signed on September 27, 2008, between Vale New Caledonia and communities south of the “Grand” for a period of 30 years. It urges the industry to create and implement specific measures to support the development of the Deep South in a sustainable manner.
In addition to its financial commitment to continue operations, Vale will continue to have the right to a long-term nickel supply agreement for a proportion of the operation’s production, allowing it to, the company says, continue addressing the growing demand for nickel by the electric vehicle industry.
Mark Travers, Executive Vice President for Base Metals with Vale, said: “Along with the continuation of the Pact, the deal also allows the Lucy Project for dry storage of tailings to proceed. We want to acknowledge the time and effort of all stakeholders to achieving this deal, including the French State, and especially the employees of VNC for their trust and support through a lengthy and uncertain process.”
VNC is a producer of nickel and cobalt from the Goro mine. It also has a processing plant and a port.