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UPDATE 1-Vale Eyeing Full Restart of Sudbury Operations
Feb 8,2010 10:22CST
industry news

TORONTO, Feb. 8 -- Brazilian miner Vale (VALE5.SA: Quote) will continue to push its Sudbury, Ontario, nickel and copper operations towards full production, regardless of whether it is able to settle an almost seven-month strike at the complex, a spokesman said on Friday.

The company began a partial restart of two mines in October using outside contractors and nonstriking workers, and fired up one of the two furnaces at its main Sudbury smelter last month. It is now restarting another mine.

In an email, Vale spokesman Cory McPhee said the company shipped its first nickel from the smelter on Thursday, and plans to continue to move ahead.

"Our preference is to resume full operations with all employees, but our plan is to continue moving forward with the operations -- which would eventually include full resumption of production, even in the absence of an agreement," he said.

"There is no timetable for this at this point."

About 3,000 Sudbury workers went on strike in mid-July after talks broke down over pension and bonus issues. Workers at Vale operations at Port Colborne, Ontario, and at its Voisey's Bay nickel mine in the province of Newfoundland and Labrador have also been on strike since last summer.

Vale said last week it would also resume nickel mining and milling at Voisey's. At normal output, Vale's Sudbury and Voisey's operations produce nearly 10 percent of the world's nickel.

Vale acquired the operations when it bought Canada's Inco in 2006. Inco had a long history of labor disputes, but this is believed to be the first time the operations have been restarted in the middle of a strike.

The deepening dispute contrasts with the quick resolution of contract talks at rival Sudbury nickel miner Xstrata PLC (XTA.L: Quote), which settled a new three-year contract with unionized workers earlier this week and avoided what many had expected would be a similar strike. Xstrata bought Sudbury miner Falconbridge in 2006.



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