Column: BHP joins the lengthening list of nickel price casualties
Indonesia's nickel production surge is challenging the West's ambitions of diversifying its critical metals supply chains.
Brazil’s mining giant Vale (NYSE:VALE), the world’s biggest iron ore producer, may reconsider the sale of $10 billion of its best assets by the end of 2017 if market conditions remain favourable, a local media outlet reports.
Vale swung to a net profit in the third quarter of the year helped in part by better prices for the commodities it mines, mainly iron ore and nickel.
The Rio de Janeiro-based company swung to a net profit in the third quarter of the year helped in part by better prices for the commodities it mines, mainly iron ore and nickel. And if the situation remains the same or improves, Noticias de Mineracao reports, the board may reconsider selling some of its key assets, as announced in February.
Until then, Vale’s streamlining efforts continue to be centred on cost cutting, moving to higher-quality deposits and offloading less-important assets, such as its fertilizer business and its Australian coal mines.
But Vale’s debt-cutting goal — it’s sitting on a $26 billion net debt at the moment — has been complicated by its efforts to start production at its $14 billion S11D iron ore mine before the end of the year.
The Samarco dam collapse in Nov. 2015, which killed at least 17 people and became Brazil’s worst environmental disaster, also dented Vale’s balance sheets, forcing the miner to book a write-down of $132 million in unpaid dividends and royalties earlier this year.
Even with the challenges, Vale has managed to remain competitive. Its shares, despite falling more than its major rivals since the commodities downturn began, have outperformed this year. The miner, which is also the world’s largest nickel producer, has doubled in value in 2016, while BHP Billiton (ASX:BHP) and Rio Tinto (LON:RIO) have gained 28% and 45%, respectively.
