TORONTO – Glencore Xstrata and Vale have broken off talks to merge their nickel operations in Sudbury, Ont., according to a report by the Reuters news agency, citing unnamed sources.
The report said talks to combine the nickel mining and processing operations broke down over a disagreement over how to share the costs and savings.
Concerns about government and union reaction to potential job cuts and shutdowns were also a concern, Reuters said.
The news agency reported last year that the two companies were in preliminary talks about combining the Ontario operations.
Nickel prices, which traded around $6 to $6.50 per pound last year, have improved to more than $8 per pound in recent months.
It was not the first time the two companies have discussed working together to cut costs.
In 2006, shortly after Xstrata took control of the former Falconbridge operations, the company said it had a team ready to discuss cost-saving opportunities.
Vale and Xstrata also held talks regarding a possible merger deal that were called off in March 2008 without an agreement.
Vale, which is based in Brazil, owns the former Inco Ltd. nickel operations in Sudbury that it bought also in 2006.