Brazil Miner Vale Grows Weary of Nickel – by Paul Kiernan (Wall Street Journal – July 27, 2017)

RIO DE JANEIRO – Brazilian mining giant Vale SA, the world’s largest producer of nickel, signaled Thursday that it will stop betting on a recovery in prices for the metal after such hopes failed to materialize in recent years.

Chief Executive Fabio Schvartsman, who took the helm of the company in May, said Vale’s nickel investments in recent years haven’t paid off because they were based on unrealistic price expectations.

“Every one of Vale’s nickel production facilities will have to work on the assumption that current prices will remain for a long period of time, ” Mr. Schvartsman said in a conference call with analysts. “In other words, Vale will stop making investments thinking that the price of nickel in the future will be much higher than at present.”

Vale has long anticipated an upturn in the nickel market, which peaked in 2007 and never recovered. In late 2014, when prices were around $16,000 per metric ton, Mr. Schvartsman’s predecessor, Murilo Ferreira, told investors that prices would likely rise “substantially” higher than Vale’s $21,000 forecast for the coming year.

Instead, prices went the other way, and nickel is currently trading at less than $10,000 a ton.

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