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Vale Inco
Type Wholly owned subsidiary
Founded 1902
Headquarters Canada Toronto, Canada
Key people Murilo Ferreira, President & CEO
Parviz Farsangi, EVP & COO
Jennifer Maki, EVP & CFO
Industry Mining
Products Nickel, copper, cobalt, PGMs
Website www.valeinco.com

Vale Inco (formerly CVRD Inco)[1] is a wholly owned subsidiary of the Brazilian mining company Vale. It is Vale's nickel mining and metals division and is headquartered in Toronto, Ontario, Canada. It produces nickel, copper, cobalt, platinum, palladium, 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.

Contents

Pre-Vale History

The logo of Inco Limited and CVRD Inco, prior to CVRD's rebranding as Vale on November 29, 2007.

The Canadian Copper Company was founded following the discovery of copper deposits in Sudbury, Ontario. Initially, ore was shipped for smelting to a plant in Constable Hook, New Jersey, owned by the Orford Copper Company. Processing soon revealed that the ore was also rich in nickel and exploration tests revealed an enormous potential. In 1902 the International Nickel Company, Ltd. was created in Camden, New Jersey as a joint venture between Canadian Copper, Orford Copper, and American Nickel Works. In 1916, the International Nickel Company of Canada, Ltd. was incorporated as the operating company in Copper Cliff near Sudbury, and in 1918 the company built a new refinery in Port Colborne. The International Nickel Company of Canada, Ltd., first began using the trade name Inco in 1919.

In 1929 the corporation underwent a major expansion by absorbing the British-owned Mond Nickel Company. A head office was established in Toronto. During World War II, Inco's Frood Mine produced 40% of the nickel used in artillery by the Allies. Inco also maintained a machining plant located in Sterling Forest, NY. The Sterling Forest Site was sold and is now owned and occupied by International Business Machines. In 1972 the Inco Superstack was built in Sudbury. In 1976, the company’s name was officially changed to Inco Limited.

In order to generate cash Inco sold its manufacturing sites of nickel alloys to Special Metals Corporation in 1998. Special Metals Corporation however filed Chapter 11 in March 2002.

Takeovers (2005–2006)

On October 11, 2005, Inco announced a friendly takeover bid to buy out the operations of longtime rival Falconbridge for $12 billion. If approved, the deal would have made Inco the world's largest producer of nickel. 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.

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. 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; that offer was also withdrawn because of the failure of the Inco-Falconbridge merger.

On August 14, 2006 Brazilian mining company 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. 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).

Criticism

In 2006 Inco was removed from the FTSE4GOOD index for failing to meet their human rights criteria.[2] The company has had disputes with native groups and environmental concerns over mine runoff.

Labour relations

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 workers”[3] 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

The Inco Superstack at the Inco Copper Cliff smelter in Sudbury.

Ontario, Canada

Manitoba, Canada

Newfoundland and Labrador, Canada

Indonesia

New Caledonia

Popular Culture

Inco has been immortalized in the Stompin' Tom Connors song "Sudbury Saturday Night". More recently, the Creighton Mine, owned by Inco and hosting the SNO neutrino observatory, figures largely in the plot of Robert J. Sawyer's Neanderthal Parallax trilogy.

References

  1. ^ "Welcome to Vale Inco" (HTML). http://www.inco.com/letter.aspx. Retrieved 2007-11-29.  
  2. ^ "Semi-Annual Review of the FTSE4GOOD Indices" (PDF). http://www.ftse.com/Indices/FTSE4Good_Index_Series/Downloads/FTSE4Good_March_2006_Review.pdf. Retrieved 2007-11-29.  
  3. ^ 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







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