"We are satisfied that the CVRD offer of $86 (CDN) per share represents compelling value for our shareholders," Inco chair and CEO Scott Hand said in a news release two days ago on Sept. 25.
Inco Ltd.'s board of director's recommendation that all shareholders tender their shares to the Brazilian iron ore mining giant probably brings to an end a year-long bidding war for the iconic nickel miner.
Because CVRD has yet to obtain clearances from the European
Commission and Investment Canada, they have extended their
Sept. 28 deadline offer until Oct. 16.
Most people in this city, including me, can't help but feel a
little sad that Inco could not have stayed Canadian. It is the
end of an era that defined both this community and the Canadian
mining industry.
However, being controlled by the fourth-largest mining company
in the world brings many positive benefits to the Sudbury
Basin. The primary one is access to capital that can fast
foreword the new generation of mines desperately needed by a
nickel-hungry global market.
Brazil is one of four, so called BRIC countries-the others are
Russia, India and China-that will have an enormous impact on
the coming transformation of the global economy. This historic
transformation due to the urbanization and industrialization of
the BRIC countries and other emerging smaller markets will
profoundly affect Ontario's manufacturing might with low-cost
competitive pressures.
Conversely, Northern Ontario's mining industry, especially the
Sudbury Basin's vast nickel deposits, mining supply and
services sector and mining education expertise, stand to
benefit.
Sudbury's future has never looked so promising. We have the
resources and specialized mining skills to prosper in the new
global economy of the 21st century and our impact and
importance to the Ontario and Canadian economies will continue
to grow.
Regardless of the media hype that the commodity super-cycle is
over, due to an impending American recession and ensuing slower
economic growth around the world, nickel is one of the few
metals that will continue to shine.
Last week, the World Bureau of Metal Statistics stated that the
global nickel market experienced a 51,000-metric ton deficit
from January to July of this year.
"Inventories throughout the supply chain are at the lowest
levels we have ever seen," said Inco executive vice-president
marketing, Peter Goudie in a recent news release. "Our
customers are looking for more nickel, and we are doing all we
can to supply them, but it is difficult to meet all demands. As
we have suggested would happen, the nickel market is now in a
place where the industry has never been before."
BHP Billiton is the world's largest mining company. In the
company's recent annual report, CEO Chip Goodyear comments on
the enormous changes in China due to the internal migration of
hundreds of millions of people to urban areas that need huge
infrastructure and resources.
He said, "We believe the world may be witnessing just the
beginning of a whole new period of change and BHP Billiton is
an essential element of that change. All the raw materials that
we produce and sell are essential elements of these
infrastructure requirements."
Change is always stressful. The Sudbury Basin has witnessed an
enormous amount of negative change over the past thirty years.
Take heart, for the next 30 years the change will be for the
better.
Stan Sudol is a Toronto-based communications consultant and policy analyst who writes extensively on mining issues. He can be reached at[email protected].
