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Vale Canada

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Vale Canada Limited
Company typeWholly owned subsidiary
IndustryMining
Founded1902
HeadquartersToronto, Ontario, Canada
ProductsNickel, copper, cobalt, PGMs
RevenueIncrease US$ 8.3 billion (2012)
Increase US$ 3.8 Billion (2012)
Number of employees
12,000
ParentVale
SubsidiariesPT Vale Indonesia (34%)
Websitenickel.vale.com

Vale Canada Limited (formerly Vale Inco, CVRD Inco and Inco Limited; for corporate branding purposes simply known as "Vale" and pronounced /ˈvɑːleɪ/ in English)[1] is a wholly owned subsidiary of the Brazilian mining company Vale. Vale's nickel mining and metals division is headquartered in Toronto, Ontario, Canada. It produces nickel, copper, cobalt, platinum, rhodium, ruthenium, iridium, gold, and silver. Prior to being purchased by CVRD (now Vale) in 2006, Inco was the world's second largest producer of nickel, and the third largest mining company outside South Africa and Russia of platinum group metals. It was also a charter member of the 30-stock Dow Jones Industrial Average formed on October 1, 1928.

History

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Share of the International Nickel Company, issued 7 June 1916

Founding of Inco

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The company was founded following the discovery by blacksmith Tom Flanagan[2] in Copper Cliff, Ontario of chalcopyrite deposits, while the Canadian Pacific Railway was being built.[3] Initially, ore was shipped for smelting to a plant in Constable Hook, New Jersey, owned by the Orford Copper Company. Processing revealed in 1884 that the ore was also rich in nickel and exploration tests revealed an enormous potential.

Nickel mining started in Sudbury, Ontario in 1902,[4] and that year, the International Nickel Company, Ltd. was created in New York, NY as a joint venture between Canadian Copper, Orford Copper, and American Nickel Works.[5] In 1905, Monel alloy was discovered by Robert Crooks Stanley (1876-1951)[6] and named for Inco Chairman Ambrose Monell[7] (1873-1921).[8] Meanwhile, the development of austenitic stainless steel was launched by a pair of Krupp engineers[9][10][11][12] known today as AISI Type 304 or simply 18/8, which indicates a nickel content of 8%.[citation needed] This novelty would assure the 20th-century success of the firm.

In 1916, the International Nickel Company of Canada, Ltd. was incorporated in Copper Cliff in Sudbury; this entity was a subsidiary of New York-based Inco. The company built a new refinery in Port Colborne in 1918 and during the following year, the company first began using the trade name Inco.

In 1928, the corporation merged with the British-owned Mond Nickel Company; subsequently, a competitor mine by the name of Falconbridge Ltd. was founded. By 1931, Stanley had progressed to President of the firm.[7] Between 1935 and 1939, sales exceeded 200 million pounds annually, which was more than 80% of world consumption.[13] A significant proportion of these sales found their way to the United States, with other notable markets including the Soviet Union, Great Britain, Japan, and Germany. Approximately 9 percent of company's total sales from 1934 to 1939 were to Nazi Germany, mainly to meet the growing demand of the country's armaments industry.[14]

Head office to Toronto

[edit]
Inco leadership
Name President Chairman
Ambrose Monell 1902-1917[8]
Charles Hayden -1937[15]
Robert C. Stanley 1922-1949[15] 1937[15]-1951
John F Thompson 1949[13][6] -1960
Henry S Wingate 1955-[16] 1960[17]-1971[18]
J Roy Gordon 1960-1966[17]
Albert Gagnebin 1966-[17] 1971-1973[18]
L Edward Grubb 1969-[17] 1973-[18]-1977
Charles F Baird 1977-1987[19][20]
Michael Sopko 2001[21][22] -2003[23]
Scott Hand 1992[24]-2006[19] 2003-2006[23][25][26]

A head office for the Canadian operations of Inco was established in Toronto.[citation needed] During World War II, Inco's Frood Mine produced 40% of the nickel used in artillery by the Allies.[27] From 1939 to 1945, Inco delivered to the Allies 1.5 billion pounds of nickel.[13] After the war, demand for nickel remained high because of the Korean War and the Cold War of the 1950s.[28]

In its heyday during the 1950s, Inco produced 85% of the world's nickel supply.[19] In 1956, geologists discovered the Thompson, Manitoba ore body and named it for Inco Chairman John Fairfield Thompson.[13][29] The first Canadian-born President of Inco, who held the office between 1960 and 1966, was named James Roycroft Gordon.[18]

The year 1969 saw a bloody four-month long strike at Inco's Sudbury operations, and the firm's share price was cut in half.[18]

In 1972, it was decided by Chairman L. Edward Grubb, ostensibly to pacify the labour unions, to move the head office from New York to Toronto where it resided in the Toronto Dominion Centre.[16] Also in 1972 the Inco Superstack was built in Sudbury.[citation needed] And in 1972, the Soroko project in Indonesia was begun together with involvement from six Japanese firms who together held a 40% share in the project.[16][30]

The 1975 Inco annual report had a picture of a supersonic Concorde jet which used nickel and titanium alloy blades forged by Daniel Doncaster and Sons, a 1975 acquisition of Inco (Alloy Products) division. A picture of Prince Charles talking with a Doncaster operator of electronic blade inspection equipment lies alongside it.[16] In 1976, the company’s name was officially changed to Inco Limited.[citation needed]

Inco also built and operated a facility that included a research center overlooking Blue Lake in New York's Sterling Forest area.[31] That site was sold in the 1980s. The first hostile takeover on the New York Stock Exchange was led by Grubb, who successfully executed a merger with Philadelphia-based ESB, manufacturers of amongst others the Ray-O-Vac battery.[16][32][30]

Downturn

[edit]

During the first half of the 1980s Inco bled a lot of red ink, "which caused the elimination during the five years from 1980 of more than 12,000 jobs worldwide, or 35 percent of its work force, including more than 6,000 jobs in Canada." It then produced one-third of the world's nickel. Charles F. Baird was the chairman and CEO.[19] By 1985 Inco (Alloy Products) division included: Doncasters Blaenavon Ltd Special Alloy Products Division, Doncasters Monk Bridge Ltd, Doncasters Sheffield Ltd, Doncasters Moorside Ltd, Beaufort Engineering Ltd, Whittingham and Porter Ltd, I.A.P.L. Technology Centre and Inco Selective Surfaces Ltd.[33]

In late 1994, Diamond Field Resources discovered nickel, copper and cobalt ore bodies at Voisey's Bay Mine (VBM) in Labrador, Canada. The deposit was estimated to contain 141 million tonnes at 1.6% nickel and was imagined by the then-chieftains of Inco as a 21st-century replacement for the waning Copper Cliff resource. In 1996, the VBM was purchased by Inco for 4.3 billion Canadian dollars.[34][21] Some say that Inco overpaid for VBM because of the presence of Falconbridge at the auction.[35]

In order to generate cash Inco sold its manufacturing sites of nickel alloys to Special Metals Corporation in 1998 for US$408 million. In the previous year, the division had generated US$668 million in revenue.[36] Special Metals Corporation however filed Chapter 11 in March 2002.[37][38][39]

In February 2001, nine-year CEO Michael Sopko stepped down while he announced a $400 million profit. He was replaced by New York lawyer Scott Hand.[22][40][41]

In 2002, the VBM purchase was regarded as a "costly blunder... when the company had to write down a third of the value of the $4-billion acquisition only six years after the purchase," but in early 2004 that did not prevent Hand from making a bid for Noranda and Falconbridge, both of which were at the time owned by Brascan, who then declined the Inco offer. The bait in the water attracted Mick Davis and Roger Agnelli. Hand was not deterred from his takeover madness and went to Australia to try his luck in the Western Mining sweepstakes, where he was outbid by XStrata's offer of US$5.7 billion and the ultimately successful BHP Billiton bid of $7.3 billion. Not last in the waters was Teck Cominco's Don Lindsay, a product of CIBC World Markets and who had advised Falconbridge in their failed acquisition of VBM.[35]

Takeovers (2005–2006)

[edit]
The logo of Inco Limited and CVRD Inco, prior to CVRD's rebranding as Vale on November 29, 2007
Transitional "Vale Inco" logo

On October 11, 2005, Inco's CEO Scott Hand announced a friendly takeover bid to buy out the operations of longtime rival Falconbridge for $12 billion.[42] If approved, the deal would have made Inco the world's largest producer of nickel. Davis's Xstrata (which already owned ~20% of Falconbridge shares) subsequently submitted a hostile takeover bid for Falconbridge, resulting in a bidding war between Inco and Xstrata. The Xstrata bid was successful, but not before Falconbridge employed a poison pill to delay the acquisition, raising its share price from $28 to $62.50 in the meantime.[35][25][43]

Teck Cominco submitted a hostile takeover bid to purchase Inco on May 8, 2006 for $16 billion if it agreed to abandon its takeover of Falconbridge.[44] On June 26 of the same year, Phelps Dodge submitted a friendly takeover bid to purchase a combined Inco and Falconbridge for around $40 billion;[45] that offer was also withdrawn because of the failure of the Inco-Falconbridge merger.[35][46][47][48]

On August 14, 2006 Brazilian mining company Vale S.A. (aka CVRD) extended an all-cash offer to buy Inco for $17 billion. That offer received approval from the Canadian government's investment review agency on October 19, and was accepted by Inco shareholders on October 23.[49] Part of the takeover deal was that CVRD would operate Inco as a separate nickel mining division; all of CVRD's nickel operations, including mines at Onca Puma and Vermelho in Brazil, were transferred to Inco's management. Inco was delisted from the NYSE on November 16, 2006 and the TSX on January 5, 2007. According to its current web site, Inco is now a wholly owned subsidiary of Vale (formerly CVRD).[35]

As subsidiary

[edit]

In May 2010, Vale changed the name of Vale-Inco to simply Vale, stating the change is "a milestone that aligns it more fully with other Vale operations worldwide and reflects its position as part of the world’s second largest mining company".[50][51]

In 2015, Vale was said to be exploring an IPO of its base metals unit for $30–35 billion, in order to lighten its debt load.[52]

Reorganisation as VBM

[edit]

In May 2023 it was announced that Mark Cutifani would be appointed as Chair of the new Vale Base Metals (VBM) subsidiary of global mining giant Vale S.A..[53] Vale was looking to divest from its tar baby,[54] as early as December 2022.[55] At the time VBM was a supplier to Tesla and General Motors (GM).[55] Reports were afoot that GM, Mitsui, and the Saudi Public Investment Fund were interested buyers of a 10% stake.[55] Former Tesla executive Jerome Guillen would join the "energy transition board" of VBM along with Cutifani.[56]

In May 2023 it was announced that VBM had entered a joint venture with the Ford Motor Company and Huayou Cobalt on a $4.5bn nickel processing facility in Indonesia.[53]

Vale spun out its metals business as a separate ringfenced entity headquartered in Toronto, with an independent board chaired by Cutifani. That process completed in July 2023. The unit was then one of the world’s largest producers of nickel, copper, and cobalt, and had operations across the globe. The parent company's chief executive Eduardo Bartolomeo stated that Cutifani could help the division explore a future “liquidity event”.[56][57] In early 2023, the parent company earned 80% of its profits in its South American iron mines, and the balance from its Base Metals group.[53]

In July 2023 Cutifani sold off 10% of the capital to the Saudi Public Investment Fund and 3% to Engine No. 1. The value of the transaction was $3.4 billion.[58]

As of May 2024, Vale Canada was reported to have a sales agreement with "Xstrata Copper Canada" for the sale of copper anodes and copper concentrates produced in Sudbury.[59]

Criticism

[edit]

In 2006 Inco was removed from the FTSE4Good Index for failing to meet their human rights criteria.[60] The company has had disputes with native groups and environmental concerns over mine runoff.

Labour relations

[edit]

Employees for Inco in Canada are represented by the United Steelworkers throughout all the mergers. Because of the mergers, the United Steelworkers signed an agreement with all the unions that represent mining workers in countries where Vale/Inco operate to "work together cooperatively and strategically as global partners, to build the bargaining power of worker."[61] The unions include Confederação Nacional dos Trabalhadores no Setor Minera, SINTICIM, Union syndicale des ouvriers et employés de Nouvelle-Calédonie, Union des Syndicats des Travailleurs Kanak et Exploités, Fagforbundet for Industri og Energi, Construction, Forestry, Mining and Energy Union, and the United Steelworkers.

Current operations

[edit]
The INCO Superstack at the Vale Copper Cliff smelter in Sudbury.

Ontario, Canada

[edit]

Manitoba, Canada

[edit]

Newfoundland and Labrador, Canada

[edit]

Indonesia

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  • Vale Inco's Indonesian joint venture PT Vale Indonesia Tbk, an Indonesian company which is 20 percent publicly owned (IDX:INCO), is located in Soroako. In August 2011, a dispute began because PT Inco broke its promise to build 2 smelters in Pomala and Bahodopi in 2005 and 2010 respectively, and to hand over 50,000 hectares of its 118,000-hectare concession to locals. Based on the latest feasibility study, only the Bahodopi smelter facility was possible. The dispute might go to court.[62]
  • October 11, 2011: After starting operation of its third hydropower plant at Karebbe with an output of 130 megawatts (MW), the company would increase production from 73,000 metric tons to 120,000 metric tons per year over the next five years. The first and second hydropower plants are located in Larona and Balambano with a combined output of 365 MW. As part of its Corporate Social Responsibility plan, the company has given a total of 8 MW from the plants to Perusahaan Listrik Negara (Indonesian Government Electric Company) for free.[63]

New Caledonia

[edit]
[edit]

Inco is a central theme in the Stompin' Tom Connors song "Sudbury Saturday Night". More recently, the Creighton Mine, owned by Vale and hosting the Sudbury Neutrino Observatory, figures largely in the plot of Robert J. Sawyer's Neanderthal Parallax trilogy.

See also

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References

[edit]
  1. ^ "Welcome to Vale Inco". Archived from the original on November 30, 2007. Retrieved November 29, 2007.
  2. ^ Jewiss, Tom (Spring 1983). "EARTH SCIENCES MUSEUM : The mining history of the Sudbury area". University of Waterloo. Department of Earth and Environmental Science.
  3. ^ Snyder, Kelly; Russell, Peter. "EARTH SCIENCES MUSEUM : Nickel". University of Waterloo. Department of Earth and Environmental Science.
  4. ^ "Sudbury's Big Nickel". CBC News. Retrieved February 25, 2020.
  5. ^ Weidenhammer, Erich (2018). "THE DEVELOPMENT OF METALLURGY IN CANADA SINCE 1900" (PDF). Transformation Series. Collection Series. 20 (1). Collection and Research Division of the Canada Science and Technology Museums Corporation.
  6. ^ a b Cherney, Ken; Orasi, Ron (February 16, 2009). "Robert Crooks Stanley (1876-1951) – The Grandfather of the Nickel Industry (Part 1 of 2)". No. (August 1989 Inco Triangle). Republic of Mining.
  7. ^ a b Churchill, James E. (March 23, 2021). "Historic Monel: the alloy that time forgot". Nickel Institute.
  8. ^ a b "Ambrose Monell - INTERNATIONAL NICKEL CORPORATION - 1902–1917". No. GREAT AMERICAN BUSINESS LEADERS OF THE 20TH CENTURY. President & Fellows of Harvard College. Leadership Initiative Harvard Business School.
  9. ^ "ThyssenKrupp Nirosta: History". Archived from the original on 2 September 2007. Retrieved 13 August 2007.
  10. ^ "DEPATISnet-Dokument DE000000304126A".
  11. ^ "DEPATISnet-Dokument DE000000304159A".
  12. ^ "Handbook of Stainless Steel". Outokumpu Oyj. 2013. p. 12.
  13. ^ a b c d "Manitoba's legends of rock: John F. Thompson" (PDF). Manitoba Innovation, Energy and Mines. Retrieved April 3, 2021.
  14. ^ Renner, Simon (2024). "Canadian Nickel for Nazi Germany – How Government-Business Relationships Affected British Blockade Strategies in the 1930s". The International History Review: 5-7. doi:10.1080/07075332.2024.2323493.
  15. ^ a b c Cherney, Ken; Orasi, Ron (February 16, 2009). "Robert Crooks Stanley (1876-1951) – The Grandfather of the Nickel Industry (Part 2 of 2)". No. (August 1989 Inco Triangle). Republic of Mining.
  16. ^ a b c d e Martin, Joe; de Place Filippini, Anne-Mette (February 18, 2009). "Inco Case Study: The End of Monopoly: A New World for Inco (Part 2 of 3)". Republic of Mining.
  17. ^ a b c d Martin, Joe; de Place Filippini, Anne-Mette (February 18, 2009). "Inco Case Study: The End of Monopoly: A New World for Inco (Part 3 of 3)". Republic of Mining.
  18. ^ a b c d e Martin, Joe; de Place Filippini, Anne-Mette (February 18, 2009). "Inco Case Study: The End of Monopoly: A New World for Inco (Part 1 of 3)". Republic of Mining.
  19. ^ a b c d Martin, Douglas (December 9, 1985). "INCO'S HARSH ENVIRONMENT". The New York Times Company.
  20. ^ "CHARLES BAIRD". New York Times. January 31, 2010.
  21. ^ a b "The story of Voisey's Bay – the auction 'the total value' of the Voiseys bay deal was 'closer to $4.3 billion'". Mining.com. Archived from the original on December 15, 2017.
  22. ^ a b "Inco posts biggest profit since 1990; CEO Sopko to step down". CBC. February 6, 2001.
  23. ^ a b Bertin, Oliver (March 12, 2003). "Top Inco executives given big pay raises". The Globe and Mail Inc.
  24. ^ "Scott M. Hand". The Wall Street Transcript. March 12, 2001.
  25. ^ a b "Inco's Hand Plays His Last Cards". Forbes. August 15, 2006.
  26. ^ Hand, Scott M. (2004). "Harvest time for Inco as nickel price doubles on booming demand". Metal Powder Report. 59 (5): 12. doi:10.1016/S0026-0657(04)00150-X.
  27. ^ "Sudbury nickel mine stops operations at year's end due to falling prices". Toronto Star, October 19, 2012.
  28. ^ "The mining history of the Sudbury area". University of Wateroo. February 28, 2013. Retrieved February 25, 2020.
  29. ^ "History of Mining in Thompson & Area | Heritage North Museum". heritagenorthmuseum.ca. Retrieved October 23, 2018.
  30. ^ a b Martin, Joe (2009). Relentless Change: A Casebook for the Study of Canadian Business History. University of Toronto Press. p. 161. ISBN 9781442697157.
  31. ^ Salpukas, Agis (July 5, 1979). "Inco Diversifying via Research". The New York Times. ISSN 0362-4331. Retrieved April 26, 2020.
  32. ^ Gaughan, Patrick A. (2007). Mergers, Acquisitions, and Corporate Restructurings. John Wiley & Sons. p. 48. ISBN 9780470135945.
  33. ^ "Daniel Doncaster and Sons". Grace's Guide Ltd. February 3, 2020.
  34. ^ "Diamond Fields International Ltd. - Management – Thu Mar 23, 2017". Archived from the original on April 21, 2017. Retrieved March 23, 2017.
  35. ^ a b c d e McNish, Jacquie (November 24, 2006). "The great Canadian mining disaster". The Globe and Mail Inc.
  36. ^ The New York Times, July 10, 1998 Company News: Special Metals agrees to acquire alloys unit from Inco
  37. ^ Carrie Kocik (July 14, 2008). "Special Metals, U.S. Units File For Chapter 11 In Kentucky". The Wall Street Journal. Retrieved August 27, 2024.
  38. ^ "Metal Co. Files for Bankruptcy". Midland Daily News. March 28, 2002. Retrieved August 27, 2024.
  39. ^ Keshia Clukey. "After years of struggles, Special Metals' $10M expansion 'a good sign'". Observer-Dispatch. Retrieved August 27, 2024.
  40. ^ Robinson, Allan (February 7, 2001). "Inco's Sopko to step down in April". The Globe and Mail Inc.
  41. ^ "Mike Sopko quitte la direction d'Inco". TVA. February 6, 2001.
  42. ^ "Inco and Falconbridge demonstrate synergy values". Team Publishing Ltd. International Mining. June 15, 2006.
  43. ^ Bream, Rebecca (May 14, 2006). "Inco raises Falconbridge offer to $17.6bn". The Financial Times Limited. Archived from the original on December 10, 2022.
  44. ^ CAMPBELL, COLIN (May 22, 2006). "CRASHING SCOTT HAND'S BIG DAY". St. Joseph Communications. Maclean's.
  45. ^ "U.S. Company Buys Canada's Inco, Falconbridge In Major Mining Deal". CityNews. June 26, 2006.
  46. ^ Heinzl, Mark (June 2, 2006). "Inco's Chairman Plays Down Talk Of 3-Way Merger". Dow Jones & Company, Inc. The Wall Street Journal.
  47. ^ "Phelps Dodge, Inco cancel their merger". NBC Universal. The Associated Press. September 5, 2006.
  48. ^ Heinzl, Mark (September 6, 2006). "Phelps Dodge Cancels Bid for Inco". Washington Post.
  49. ^ Austen, Ian (September 25, 2006). "Brazilian Mining Company to Buy Inco of Canada". The New York Times. Retrieved January 25, 2021.
  50. ^ "VALE INCO ANNOUNCES NAME CHANGE TO VALE « Vale Inco Negotiations – Business News". Archived from the original on May 30, 2010. Retrieved June 2, 2010.
  51. ^ Migneault, Jonathan (October 6, 2016). "A decade ago, Vale bought Inco: What's the company's legacy in Sudbury?". Sudbury.com.
  52. ^ "Vale Said to Hire Canada's Stikeman Elliott for Base Metals IPO". Bloomberg. June 17, 2015.
  53. ^ a b c "New Vale base metals boss Cutifani to focus on margins, marketing and potential IPO".
  54. ^ "Vale to break out base metals business, sell stake in 2023 - BNN Bloomberg". December 7, 2022.
  55. ^ a b c https://www.mining-technology.com/news/vale-listing-metals-unit-stake/?cf-view. {{cite news}}: Missing or empty |title= (help)
  56. ^ a b "Vale taps ex-Anglo CEO Cutifani to chair battery metals board".
  57. ^ "Former Sudbury mining leader is back on board with Vale". July 7, 2023.
  58. ^ https://www.sudbury.com/local-news/vale-base-metals-confirms-partial-sell-off-to-saudis-and-the-us-7340328. {{cite news}}: Missing or empty |title= (help)
  59. ^ https://mininglifeonline.net/company/sudbury-operations/467. {{cite news}}: Missing or empty |title= (help)
  60. ^ "Semi-Annual Review of the FTSE4GOOD Indices" (PDF). Archived from the original (PDF) on September 28, 2007. Retrieved November 29, 2007.
  61. ^ United Steelworkers. Steelworkers and Global Union Partners Announce Unity Accord. March 20, 2007. Available at http://www.usw.ca/program/content/3964.php?lan=en
  62. ^ "Inco denies contract and environmental violations". August 22, 2011.
  63. ^ "Inco expands operations for sustainability". October 14, 2011.
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