Operations at Prony Resources recommenced in the week of March 28 with the restart of nickel production expected mid-April, the company said in a statement.
The operation, designed to produce up to 57,000 mt/year of processed nickel, with cobalt as a byproduct, is believed to have been at a standstill since mid-December 2020, following protests by independence activists on the Southwest Pacific French island territory of New Caledonia. Prior to this it had been producing below capacity.
VNC had been dogged by environmental protest and refinery issues since its Goro nickel and cobalt mine started up in 2011.
The transaction with Prony Resources involved a $1.1 billion support package for VNC, Vale said in a statement. Vale Canada Limited will contribute $555 million of this to ensure operational continuity, and Vale will also finance the Pact for Sustainable Development of the Extreme South, which will also play a part in the project’s development.
New Caledonia’s Usine du Sud will be majority-owned by New Caledonian interests, including Prony Resources employees, communities and government entity Société de Participation Minière du Sud Calédonien SAS (SPMSC) who will together hold a 51% shareholding in Prony Resources.
Trafigura holds 19% in the operation, together with an offtake agreement for the Goro Resources nickel production, allowing it to supply this vital ingredient to international markets for lithium-ion batteries for electric vehicles, said Trafigura’s chief executive and CEO Jeremy Weir.
Prony Resources’ management and international investment firm Agio Global indirectly hold the remaining 30%.
Vale will also have long-term rights to part of the production, which will allow it to continue to supply the growing demand for nickel for EV production, it said.
Carmaker Tesla will provide technical support through a technical and industrial partnership with Prony Resources, according to Prony Resources’ statement.
Formalization of the acquisition followed several months of negotiations and some takeover-related protests. Antonin Beurrier, chief executive of Prony Resources New Caledonia, said he now foresees “a sustainable future for the operation that will preserve 3,000 direct and indirect jobs and ensure the successful completion of Project Lucy for dry storage of tailings, the largest private investment on the island for the next three years, creating 600 new jobs.”
Vale CEO Eduardo Bartolomeo said the miner was pleased to have achieved its aim to withdraw from the New Caledonia operation “in an orderly and responsible manner”, as the company continues with a strategy to simplify its base metals division and focus on core assets.
Questioned about Trafigura’s growing presence in the global cobalt market, a spokesperson for the trader said it aims to be one of the top three in each of the products it trades.
Earlier in the day, the Democratic Republic of Congo’s state-owned cobalt company Entreprise Generale do Cobalt had announced the setting up of a five-year accord with Trafigura, under which the Geneva-based trader would help it market the country’s entire production of artisanally-mined cobalt.