November 27, 2019 / 12:24 AM / 15 days ago

Vale sees $1.6 billion impairment charge for fourth-quarter in New Caledonia write down

FILE PHOTO: The logo of the Brucutu mine owned by Brazilian mining company Vale SA is seen in Sao Goncalo do Rio Abaixo, Brazil February 4, 2019. REUTERS/Washington Alves

RIO DE JANEIRO (Reuters) - Brazilian miner Vale SA (VALE3.SA), the world’s top nickel producer, will write down its New Caledonia mine and incur a non-cash impairment charge of about $1.6 billion in the fourth quarter, the company said on Tuesday in a securities filing.

Vale said its annual assets review of its base metals and coal business is still underway and further impairments charges that would also impact fiscal year 2019 cannot be ruled out.

The $3 billion value of the New Caledonia operation will be reduced by $1.6 billion, Vale said. The charge will not have any cash flow impact and will be treated as an exceptional item, it said.

The miner said it also revised the coal mining plans for its Moatize mine, in Mozambique, which will be closed for three months next year for maintenance.

Vale failed to sell its stake in New Caledonia mine, which has been beset by technical setbacks, a chemical spill and violent protests. The company gave up trying to sell a stake or find a partner to invest in the mine in 2018, after years of failed efforts to attract investors.

Reporting by Anthony Boadle and Tatiana Bautzer; Editing by Chris Reese

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