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UPDATE 2-Vale says Goro nickel plant to start in January

Published 10/21/2009, 04:49 PM
Updated 10/21/2009, 04:51 PM
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* Goro nickel plant to begin operating in January

* 2010 output of 20,000 tonnes, capital cost $4.3 bln

* No talks scheduled in Canada mine strikes (Adds details and background. In U.S. dollars)

By Cameron French

TORONTO, Oct 21 (Reuters) - Brazil's Vale has begun mining ore at its Goro nickel mine in New Caledonia and expects the processing plant to begin production early next year, a company spokesman said on Wednesday.

"It should be up and running in January," said Cory McPhee, a spokesman for Vale Inco, the company's Toronto-based nickel wing.

The launch of Goro has been delayed several times over the past year. Vale said this week that the operation has cost about $4.3 billion to build, compared with a previous estimate of $3.2 billion.

It is expected to produce 60,000 tonnes of nickel per year eventually, but will produce just 20,000 tonnes in 2010 as it slowly ramps up, McPhee said.

Vale acquired the project when it bought Canadian nickel miner Inco in 2006. New Caledonia is an island territory of France in the South Pacific.

Vale has also been building the slightly smaller 52,000 tonne-per-year Onca Puma nickel project in Brazil, which is expected to be commissioned in the third quarter of 2010 and to begin commercial production in January 2011.

Vale estimates capital costs for Onca Puma at $2.3 billion.

STRIKES CONTINUE

McPhee said there has been no recent progress in resolving strikes at its Sudbury and Voisey's Bay nickel operations in Canada.

About 3,000 workers at the Sudbury, Ontario, operation went on strike in mid-July, while a few hundred workers at Voisey's struck on Aug. 1. A small operation at Port Colborne, Ontario, has also been silent.

The company and its unions have not met formally to try to resolve the strikes since they started. "There's no (talks) scheduled at this point in time, so in that respect it remains status quo," McPhee said.

Tensions increased three weeks ago when Vale began a partial restart of copper and precious metal mining at Sudbury, using workers from outside the striking bargaining unit. The company has not resumed nickel production.

The United Steelworkers union has filed a grievance against Vale, seeking a ruling from an Ontario labor board to force the company to stop using office employees to do mining and milling work.

Vale's Sudbury operations produced 85,300 tonnes of contained nickel last year, while Voisey's Bay, in Labrador, produced 77,500 tonnes. (Reporting by Cameron French; editing by Peter Galloway)

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