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Brazil's Companhia Vale do Rio Doce (CVRD), the giant iron ore miner, announced that it has obtained approval from the Canada government to buy for US$ 17 billion the world's second largest nickel miner. Inco.
Commenting on the approval, CVRD's CEO, Mr. Roger Agnelli, said "We are delighted with this news, which confirms that the Minister of Industry is satisfied that CVRD's acquisition of Inco will be of net benefit to Canada. "We have always believed," Mr. Agnelli added, "that this transaction was good for Inco and for Canada. In fact, we think it is positive for everyone involved - for CVRD, Inco shareholders, employees, suppliers and the provinces and communities in Canada where Inco carries on business. We now look forward to CVRD completing the offer." In order to demonstrate to the Minister of Industry that its offer will be of net benefit to Canada, CVRD has made commitments to the Minister to establish CVRD's global nickel business (CVRD Inco) and based it in Toronto, Ontario, with responsibility for the global nickel business of CVRD and a mandate to expand its business as a global leader in the nickel industry. In furtherance of this mandate, CVRD will transfer management responsibility for its interest in existing and future nickel projects to CVRD Inco, including its interest in the Onça Puma and Vermelho projects in Brazil. CVRD Inco's global activities will be managed from its Toronto, Ontario head office, which will continue to exercise head office functions and activities with significant Canadian participation, including a Canadian Chief Operating Officer (COO) and a majority of its senior management. There will be no layoffs at Canadian operating facilities for at least three years, and in any event total employment at such facilities will not fall below 85% of current levels. Investments To ensure the long-term, sustained success of CVRD Inco, Canadian expenditures will be increased in a number of areas, including exploration and research and development, for a three-year period. CVRD says it believes such investments will strengthen CVRD Inco's position as a leader in the global nickel mining business, and will contribute to ensuring the long-term viability of CVRD Inco's operations in Sudbury, Ontario, and Thompson, Manitoba. CVRD Inco's participation in CVRD is expected to provide long-term stability, growth and employment in Canada. CVRD also stated that it is committed to the highest standards of social and environmental responsibility. CVRD Inco will increase spending on apprenticeship programs for First Nations, student employment programs and employee recruitment, education, apprenticeship and training programs in Canada for a three-year period. CVRD Inco will also increase spending on environmental compliance programs in Canada over that same period.
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