IGO to record impairment against nickel assets in strategy shift
IGO has been undertaking a strategic review in an attempt to revaluate its resources.
Vale (VALE +0.5%) would mothball its nickel project on New Caledonia next year if it does not find a strategic partner prepared to purchase a 20%-40% stake, says CEO Fabio Schvartsman of the mine, which cost billions of dollars to build and has been plagued by problems.
The future of the mine is considered a key test for Schvartsman, who has pledged to improve shareholder returns and only invest in projects that can generate good returns for shareholders at current commodity prices.
The CEO also says the company will not flood the market with iron ore, clarifying an earlier report: “We will behave properly in order to balance the market. We are in a position to do that.”
Schvartsman says a price of $60-$70/ton is a good level for the iron ore industry; at that level, analysts say big producers such as Vale can make healthy margins but the price is not high enough to incentivize higher cost production.
