LONDON (Reuters) – Brazil’s Vale SA plans to exit its troubled New Caledonia assets but still aims to ramp up nickel output ahead of rising demand for electric batteries, executives said on Wednesday.
The planned divestment of nickel operations in New Caledonia comes after Vale said last month it would write down the mine and incur a non-cash impairment charge of about $1.6 billion in the fourth quarter.
A year ago, the world’s top nickel producer unveiled plans to invest $500 million in the mine after failing to find a partner for the operation.
But on Wednesday, Chief Financial Officer Luciano Siani said Vale had decided to exit the operation, which has been beset by technical setbacks, a chemical spill and violent protests.
“We realized we don’t have the competence to raise the production levels with this technology to where we want it to be. We realize that others may have this competence,” he told an investors’ presentation in London.