Vale, Glencore break off talks over Canada nickel deal: sources
By Silvia Antonioli
LONDON (Reuters) - Vale and Glencore have broken off talks over combining their nickel assets in Canada in a deal that could have produced over $1 billion in annual cost savings, sources close to the matter said.
The discussions over linking the two companies' neighboring nickel mining and processing facilities in the Sudbury basin in southeast Canada broke down partly due to disagreement over how to share the costs and savings and to worries about government and labor union reaction to potential job cuts and shutdowns, the sources said.
At the same time, a recovery in nickel prices has made cost rationalization less urgent, they added.
"Both sides more or less agreed on what the optimum structure of a combined Sudbury business would look like, but to enable that to be created, very difficult decisions needed to be taken, and the appetite or the ability to take those decisions was not there," a source with knowledge of the situation said.
Glencore and Vale declined to comment.
One of the sources said differences in corporate culture -- with Swiss-based trader and mine operator Glencore more willing to take risk and Brazilian miner Vale more conservative -- also played a role.
GAME CHANGER Continued...