SÃO PAULO Glencore Xstrata Plc and Vale SA are considering combining their Sudbury, Ontario, nickel operations.
"For years, theres been a potential deal. I wouldnt get too excited. Lets wait and see," a source close to Glencore Xstrata told AMM sister publication Metal Bulletin.
An eventual deal could involve the sale of assets from one company to the other.
The global nickel market is facing tough times as a large percentage of nickel capacity is unprofitable at current prices. The London Metal Exchanges three-month nickel contract ended the official session at $13,975 per tonne Oct. 15, down 25.1 percent from this years $18,665 peak on Feb. 4.
This recently led Baar, Switzerland-based Glencore Xstrata to halt its Falcondo nickel mine in the Dominican Republic (amm.com, Oct. 3).
Other companies have also announced shutdowns, including Votorantim Metais Ltda., which recently ended its nickel matte operation in Fortaleza de Minas, Brazil.
Rio de Janeiro-based Vales output at Sudbury was 35,000 tonnes in the first half, while Glencore Xstratas Sudbury operation produced 12,700 tonnes of nickel in concentrates for the period. The latter operation was rebranded Sudbury Integrated Nickel Operations after Glencore bought Xstrata.
If the nickel projects at Sudbury were integrated, it wouldnt be the first team-up between Vale and Glencore.
In July 2012, Glencore acquired Vales manganese alloy assets in Europe and became the Brazilian miners agent for manganese ore.
Vale declined to comment.
A version of this article was first published in AMM sister publication Metal Bulletin.