Company News

Australia's New Century scraps acquisition of Vale's Pacific island projects

Sept 8 (Reuters) - Australian zinc miner New Century Resources Ltd said on Tuesday it will not proceed with the acquisition of Vale Nouvelle-Caledonie’s (VNC) nickel and cobalt mines on the Pacific island of New Caledonia, knocking its shares lower.

New Century had been in talks with Vale Nouvelle-Caledonie S.A.S., the Canadian unit of Brazilian miner Vale, to buy the Goro Nickel & Cobalt Mine in New Caledonia, but said in a statement that a funding package and equity structure for VNC could not be generated.

A key aspect of the indicative term sheet the parties signed in May had called for funding of at least $900 million in equity and debt from Vale and the French State.

The acquisition would have made Melbourne-based New Century a major supplier of nickel, as well as of cobalt from outside the Democratic Republic of Congo, the world’s biggest supplier.

Brazil’s Vale said it is now preparing to potentially shut down the New Caledonia nickel project after being unable to reach a sale agreement with New Century Resources, a securities filing showed on Monday.

Shares of New Century fell as much as 10% in morning trade to their lowest since April 8. (Reporting by Nikhil Subba in Bengaluru; editing by Richard Pullin)