New Century’s proposed deal for Vale’s New Caledonia asset falls through

Vale is set to place its Goro nickel and cobalt mine in New Caledonia on care and maintenance after Australian miner New Century Resources failed to submit a binding offer for the operation.

After the exclusivity period that the companies entered into in May lapsed on Tuesday, New Century said that negotiations with various stakeholders had not been able to generate a funding package and equity structure for Vale-Nouvelle-Caledonie (VNC) – Vale’s Canadian unit.

A key aspect of indicative term sheet signed in May called for at least US$900 million in equity and debt from Vale and the French state. The acquisition would have made New Century a major supplier of nickel and cobalt (outside of the Democratic Republic of Congo).

In its statement, Vale said that should no sustainable solution be found for VNC in the coming months, the operation could be shut down completely. “All parties to this negotiation have invested significant effort in an attempt to reach a solution for the sustainable future of VNC,” said Vale CEO Eduardo Bartolomeo.

“Vale and everyone involved in the divestment process – including the South province of New Caledonia, the French State and VNC management – continue to explore alternatives to create a viable future for VNC, all of which will contemplate Vale’s exit.

“We remain hopeful of a positive outcome and are working with all the parties involved with that purpose in mind,” he added.