Corun, a Shanghai-listed nickel processor and battery maker with close ties to the Chinese government, lodged a case with an intermediary court in its local jurisdiction in Hunan Province last month claiming nearly Rmb90m ($13m) in damages from two Chinese subsidiaries of Vale Inco, the wholly owned Canadian subsidiary of Brazil-based Vale.

Industry insiders said it was widely known that Vale Inco was planning to sell the two joint-venture subsidiaries, in which it holds majority stakes of more than 70 per cent, and that Corun had expressed interest in purchasing one or both of them.

The patent infringement case against Inco Advanced Technology Materials (Dalian) and Inco Advanced Technology Materials (Shenyang) is almost certain to complicate Vale Inco's efforts to sell them and may lower their value to potential bidders.