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Recording date: 28th October 2020

A pretty sideways week – nickel dropped ~2% to $7.12 after a big move last several weeks

"The Triangle" - ore, Indonesian NPI, Chinese demand

Prices strong but sideways – no one is losing a lot of money, no one is making a lot of money.

Inventories of ore - nickel down slightly.

Will have to wait for the next few weeks to see what happens with ore supply from the Philippines, and inventories on hand.

Vale production numbers highlight challenge (ugly numbers)

– schedule maintenance in some numbers, but no growth in supply on the horizon!

Goro has a buyer (and not everyone is happy – a good example of challenging political climate !)

The management board of Vale New Caledonia (VNC) has moved to acquire parent company Vale's Goro nickel and cobalt operations in the region with the aid of Swiss commodity firm Trafigura. Under the terms of the current acquisition proposal, submitted to Vale on October 21 and led by VNC's current management, Trafigura would hold a 25% stake in the asset with unfettered marketing rights to all production.

The majority of the remaining 75% share capital would be divided between Caledonian interests with 10% given to the region's Société de Participation Minière (SPMSC), which represents the three provinces of New Caledonia, 5% going to the civil society...

Pro-independence politicians said the nickel resource had to be retained by New Caledonians and not passed to a foreign financier. Local chiefs in the south of the main island, as well as pro-independence parties, were fiercely opposed to a new proposal to sell the plant and its ore reserves to a consortium, reportedly led by a Swiss-based commodity trader, Trafigura. Yesterday, they marched to near the plant at Goro, with the USTKE union warning of a general strike next week to push Vale to accept a local bid submitted by Sofinor of the Northern province and its partner Korea Zinc.

The offer had earlier been rejected. One leader Raphael Mapou said action might be taken to halt work at all mines in New Caledonia.Meanwhile, media reports said an offer had been submitted to Vale by the consortium which included Trafigura, but the company had declined all comment. Le Nouvelles Caledoniennes said according to the Useonc union, the bid provided for Vale employees in New Caledonia to become shareholders.

The nickel sector with its 35 mines and three processing plants accounts for about 20 per cent of the jobs in New Caledonia. New Caledonia is the fourth biggest nickel ore producer in the world and the seventh-largest nickel producer.

Andy Home. Link here.

INSG great historically, but done by consensus in room, typically reflects 2-3 months prior

Talks about no growth, but Chinese growth will pull global number higher and shouldn’t see ROW decline materially from these levels

Near-term large surpluses discount strong growth rebound – sulphate +28%, 300 series stainless 25-30%

Interview timestamps:

0:28 - A Week in Nickel

2:02 - Vale Numbers Announced: Disappointing Results?

3:35 - Goro Has a Buyer: Good Deal or Overconfidence?

8:00 - Opinions & Thoughts on Andy Home's "EV's Have Lost Their Buzz"

10:44 - 3-Day Conference: Investors are Getting Excited for Nickel

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