28 Jul 2017

New Caledonia nickel viability in doubt

8:04 pm on 28 July 2017

The head of the Brazilian mining conglomerate Vale has again restated his doubt about the viability of its nickel plant in New Caledonia.

A photo taken on May 27, 2015 shows Brazilian Vale's nickel processing plant of Goro in southern New Caledonia.

A photo taken on May 27, 2015 shows Brazilian Vale's nickel processing plant of Goro in southern New Caledonia. Photo: AFP PHOTO / FRED PAYET

Fabio Shvartsman told the website Metalbulletin that if no solution was found for its plant in Goro, the loss-making operation would have to close.

The plant is reported to have lost $US1.3 billion in the past three years as the world nickel price has declined, dropping to half of what it was two years ago.

Mr Shvartsman said Vale wanted to make money and not invest more in the hope the price would rise.

A Vale board decision is expected next month on how to proceed, should it fail to find a way to make the operation sustainable.

Mr Shvartsman's earlier comment about the plant triggered fears of unprecedented job losses in New Caledonia which could have a severe impact on the territory's economy and finances.

Thousands of jobs are dependent on the plant's operation which has been dogged by construction delays, cost overruns and industrial accidents near its World Heritage site location.

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