At forecast contract off-take, the supply contract could represent around seven per cent of Penrice’s soda ash sales.Penrice’s Managing Director and CEO, Mr Guy Roberts, said, “Penrice continues to build its position in the growing mining industry with its offer of secure supply, consistent quality and competitive pricing.Supply to Vale NC is a positive step in the right direction.”
“Penrice is committed to working with Vale New Caledonia to support delivery of successful operational outcomes,” Mr Roberts said.
The supply contract is consistent with Penrice’s stated strategy of growing its presence in the Australian and nearby regional mining industry, in part to replace the steadily declining demand for soda ash from the Penrice’s traditional core customer base - Australian manufacturers - such as the glass, detergent and aluminium producers.
“Penrice is striving to replace declining soda ash sales to struggling Australian manufacturers. This contract, whilst not replacing lost soda ash demand of some twenty five per cent over the last three years, will provide a material boost to sales, given achievement of customer forecast demand,” Mr Roberts said.
Mr Roberts said that “The soda ash business remains a priority for attention given its headwinds – declining Australian manufacturing customer base, increasing costs, increasing regulatory and compliance burden and increased state and federal taxes, most recently the carbon tax. Options are being developed with urgency to turn around the loss making unit.”
Headquartered in Brazil, Vale is the second biggest nickel producer in the world and its New Caledonia nickel and cobalt operation is one of Vale’s largest.