Vale’s future in New Caledonia uncertain (Radio New Zealand – July 18, 2017)

http://www.radionz.co.nz/international/

New Caledonia is facing the possibilty of unprecedented job losses because of the continued low nickel price. The Brazilian company Vale is reassessing its commitment to running the Goro plant in the south of New Caledonia’s main island on which thousands of jobs depend.

Jamie Tahana asked Walter Zweifel what has triggered the concern.

WALTER ZWEIFEL: The low nickel price has been like a dark cloud over the entire nickel sector for years now, with losses being run up by all the three main operators. What sent the alarm bells ringing is the announcement by Vale’s new CEO Fabio Schvartsman in Brazil at the start of this month that it was reviewing its operation in New Caledonia. Vale runs a global network of mines and mining-related businesses which make it the world’s top iron producer. However Vale has been bleeding money in New Caledonia where it is reported to have lost $US1.3 billion in the past three years.

JAMIE TAHANA: What are the options that are being discussed?

WZ: Publicly nothing is known. The Vale board is expected to make a decision in August on how to consolidate its operations. There has been no reaction from the New Caledonian government and no word from France either. However, there is speculation in the media by experts which have been weighing up the options.

JT: And what is the experts’ view?

WZ: There appear to be four options being bandied around. The first is the plant’s closure, a second to keep running it but with reduced output, a third option is its sale and a fourth option is a partial sale or partnership.

JT: What are the possible consequences?

WZ: It depends, of course, on what the Vale board decides, but all indications are that jobs are on the line at a time when employment issues are a worry in general in an economy which has come off the boil.

For the rest of this article: http://www.radionz.co.nz/international/programmes/datelinepacific/audio/201851486/vale-s-future-in-new-caledonia-uncertain

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