New push to combine Glencore, Vale mining assets in the Sudbury basin

Sudbury mine ramps down Glencore looks to partner with Vale in 2024.

The news service Reuters is reporting that the long dreamed of merger of Vale and Glencore mining assets in Sudbury basin could happen this year.

“Talks for a Sudbury tie-up have been on and off since 2006, when annual savings were put at more than $500 million, with a number of options being touted for the mining and processing operations in the area,” the Reuters story said.

Brazil-based Vale purchased the former Inco for $19.6 billion in 2006. Talk of combining efforts in the area have surfaced from time to time, and an official with the company raised the issue recently, according to the Reuters story.

“We’ve got some interesting thoughts on what is possible, (including) tailings (waste) and some of the old areas that could be redone and we are working through that,” VBM Chairman Mark Cutifani told Reuters in an interview on the sidelines of the Future Minerals Forum (FMF) mining gathering in Riyadh.

“During the course of this year we should work out whether there’s something we can do together or not. Certainly that is one of my priorities.”

In an email to CTV News on Thursday, a Vale Base Metals spokesperson said they are always considering opportunities.

“In the normal course of business, we regularly evaluate strategic alternatives and partnerships to create value for our shareholders,” the email said.

“As previously disclosed, we continually assess potential synergies with Glencore’s Nickel Rim Mine in the Sudbury basin.”

A spokesperson for Glencore declined comment.

“We appreciate your question but we do not comment on speculation or rumours,” Glencore spokesperson Iyo Grenon said in an email.

Mining analyst Stan Sudol said merging nickel assets in the Sudbury basin is long overdue.

“And with current low metal prices, this is the perfect time for a Sudbury Basin Joint Venture to take advantage of cost synergies,” Sudol said in an email.

He said a major problem in the Sudbury Basin is the mining giants are neighbours in some areas and ore deposits underground cross under these boundaries.

MINING ON OPPOSITE SIDES

“Currently, you could get a situation where two mineshafts and other infrastructure are built on opposite sides of a boundary to access the same large ore deposit,” Sudol said.

“They would need to leave a huge amount of ore untouched or neutralized to create a wide enough distance between both mines, due to provincial mine safety regulations.”

Ore processing is done at each company’s smelters and refineries, both of which run at below capacity.

“Any initiative that saves money and increases ore supply would be very beneficial for the Sudbury Basin,” Sudol said.

“And combining the Sudbury exploration teams of both companies would also considerably help in finding the next generation of local mines.”

Demand for high-grade nickel for the electric vehicle market is growing, and western countries want nickel that is mined ethically.

“Sudbury nickel is clean and green,” he said.

“Sudbury is the largest and longest-producing mining camp in Canada and probably in the No. 2 spot in North America in size, after Nevada’s Carlin Trend. And remember, the polymetallic ore found here not only contains nickel, but copper, cobalt, platinum group metals and gold and silver.”

The Reuters story said Vale owns five mines in the area, while Glencore owns the Nickel Rim South mine that is winding down operations after 15 years, and the Onaping Depth project. The assets also produce copper and precious metals.

“It makes sense to do something where we are sharing infrastructure,” Cutifani told Reuters.