Vale sells VNC to the Prony consortium; will contribute US $ 555 million

Vale sells VNC to the Prony consortium; will contribute US $ 555 million
Vale sells VNC to the Prony consortium; will contribute US $ 555 million

Vale SA concluded the sale (exit) of its shares in the capital of New Caledonia Valley (VNC – Vale Nouvelle-Calédonie SAS), nickel producer. The outcome is in a statement this Wednesday (31/03) to the Stock Exchanges. Therefore, via subsidiary Vale Canada Limited, it will transfer the stake to the consortium Prony Ressources New Caledonia. Until then, Vale held 95% of VNC’s capital.

In addition to the success in the desire to leave, there are two aspects that are very relevant to Vale. First, maintain the right to a long-term supply contract for the targetl. And second, it is part of the provision financial contribution of $ 1.1 billion, which thus ensures the continuity of VNC’s operations. Vale Canada will then participate (will write off its balance sheet) with US $ 555 million. See the full statement HERE.

The VCN complex, in operation for 10 years, is located in Goro, in the French archipelago New Caledonia. The facilities allow production of 60 thousand tons of nickel oxide per year. But in 2019, due to an operational crisis, it produced only 23,400 t. In other words, it had an occupation just over a third. The company’s product range includes other items such as nickel hydroxide and cobalt carbonate.

The Paris government released the statement. Because, by the proclamations, the Government of France would give the final say. The remaining 5% in the company’s capital belongs to Société de Participation Minière du Sud Calédonien SA. (SPMSC).

Within Prony Ressources is Trafigura. This, in turn, is one of the global leaders in the raw materials business.

VNC nickel shipment – Photo: CNZ / Disclosure

Vale declared commitment

The announcement to the Stock Exchanges is supported by a declaration of “satisfaction” by the president of Vale, Eduardo Bartolomeo. He emphasized, for example, the continuity of VNC. “Vale is fully committed to this transaction”. The preference in the nickel purchase contracts will therefore allow the Brazilian mining company to continue as a relevant supplier in the niche of ielectric car industry – with battery powered motors. The company has produção de níquel also in Brazil.

Time-consuming negotiation

The search for investors at VNC was, however, a lengthy operation. The Brazilian mining company’s first announcement was in May. In season, New Century Ressources Limited (NCZ) led among those interested.

But in December, a sales protocol came to the Prony consortium. The parties have established end of the 1st quarter of 2021 as the limit of negotiations. Therefore, closed on this date. Look HERE.

** This text does not necessarily reflect the opinion of the UAI Portal.

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