UPDATE 1-Vale eyes Sudbury deal with Glencore to cut costs
RIO DE JANEIRO Nov 7 (Reuters) - Brazil's Vale confirmed on Thursday it is in talks with Glencore Xstrata over potential cooperation between the mining groups' nickel operations in Canada's Sudbury basin, in an effort to cut costs as prices languish.
Vale said on Thursday it was not planning "a corporate joint venture" in Sudbury, but was looking at other options to join forces in mining, milling and smelting to save cash.
Nickel prices have fallen by around a fifth since January and are languishing around four-year lows, weighed down by oversupply.
"We are looking at the synergies now and plan to start negotiating next year," Vale's chief executive Murilo Ferreira told analysts in a quarterly earnings call, adding an eventual deal would not involve a full merger.
Reuters reported last month that Glencore and Vale had revived talks over long-debated cooperation in Sudbury, with the companies considering a number of options for their mining and processing operations in the area.
Sources familiar with the situation said then that talks were at an early stage.
"We are looking at ways to create synergies for our non-ferrous operations," Peter Poppinga, Vale's head of non-ferrous metals, said.
The two main operators in Sudbury have held talks on joining forces on more than one occasion before, both as Inco and Falconbridge and, later, as successor companies Vale and Xstrata. Continued...