The Sudbury Star is the City of Greater Sudbury’s daily newspaper.
Should Vale put its base metals division up for sale, there would likely be only one buyer with deep enough pockets – the soon-to-be-merged Xstrata and Glencore.
“If that merger goes through, the merged Xstrata/Glencore International plc would be a real huge entity,” mining analyst Stan Sudol said. “Certainly, they could afford to buy the base metal assets of Vale.
“It’s a merger the Sudbury Basin would welcome. There are enormous amounts of synergy that couldn’t be realized because of it being two entities. Ninety-five per cent of the area’s nickel operations would be unified.”
Six years ago, the former Inco and the former Falconbridge held merger discussions. If that had happened, most of Sudbury’s mining, milling and smelting operations would have been owned by one company.
Instead, Brazil-based Vale bought Inco for $19.4 billion and Swiss-based Xstrata bought Falconbridge in 2006 for $20 billion.
Shareholders will vote Sept. 7 on whether to approve a $30-billion plan to merge Xstrata and Glencore, the world’s largest diversified commodities trader.
Sudol said another company that might be interested in buying Vale’s base metals division might Vancouver-based Teck.
The Canadian mining company showed interest in acquiring the former Inco Limited in the past, but Teck may find the cost too high to absorb this time around, he said.