Vale (NYSE: VALE), the world’s top producer of nickel and iron ore, has received non-binding offers for its operations on the Pacific island of New Caledonia, it said in a conference call on Wednesday.
The Brazilian mining giant said it expected to have “relevant news” on the topic within a month or two.
Vale put its New Caledonia nickel assets on the block in December. The decision came after it had to write down $1.6 billion in the fourth quarter related to the ailing mines, the world’s biggest nickel operations.
That announcement came less than a year after it unveiled plans to invest $500 million in the nickel mine after failing to find a partner for the operation.
Vale last week axed its 2020 production forecast for the metal to 180,000 to 195,000 tonnes from 200,000 to 210,000 tonnes, excluding its unit in New Caledonia.
The extension of the care and maintenance period at its Voisey’s Bay nickel mine in Canada for up to three additional months, announced in early April, also weighed on the revised figure.
Delivering first quarter results, the miner said its near-term view for nickel has changed as a result of covid-19. The pandemic, it said, has “heavily impacted” its financial results.
Vale believes the nickel market will enter a surplus in 2020, compared with its previous view of continued deficits. Its long-term outlook, however, remains positive due to factors including demand for nickel in the batteries that power electric vehicles (EVs).
Commerzbank analyst Daniel Briesemann said in a note last week that while mines will close or remain suspended for longer than expected, the negative impact of the coronavirus would be particularly seen in the demand side.
“The nickel market could be well oversupplied this year,” he said.
Vale has two nickel projects in the pipeline in Indonesia, which it plans to develop with joint venture partners.
The Bahodopi project is slated to produce 70,000 tonnes a year of ferronickel and is being developed with Chinese partners.
Vale is also working with Japan’s Sumitomo Metal Mining in Pomalaa for a processing plant. The facility aims to churn out 40,000 tonnes a year of nickel output suitable for batteries.