Vale Restarting Sudbury Nickel Using Contractors

TORONTO, Mar. 15 -- Vale (VALE5.SA: Quote) is going ahead with plans to bring in outside workers to increase production at its strike-bound Sudbury nickel and copper mining operations following last week's rejection of a contract offer, a spokesman said on Sunday.

Vale's Sudbury mine workers voted nearly 90 percent to reject the offer from the Brazil-based company on Thursday, prolonging a strike that began July 2009. A separate strike at Vale's Voisey's Bay nickel operation in eastern Canada has been going on since last August.

The company resumed copper mining at Sudbury last September and partially restarted its nickel smelter in January, processing mined nickel stockpiles and using employees from other divisions.

In February, the company said it planned to resume nickel mining at its Coleman and Creighton mines in Sudbury using workers from an outside contractor.

Vale will now go ahead with that ramp-up, spokesman Cory McPhee said on Sunday.

Mined nickel will be smelted and shipped to the company's Clydach Refinery in Wales, which expects to be at full capacity by April, producing 7.9 million pounds (3,600 tonnes) of nickel per month.

Vale, which acquired the Sudbury and Voisey's Bay operations when it bought Canada's Inco in 2006, has also resumed partial production at the Voisey's Bay Ovoid mine and mill.

It is currently operating on a two-weeks on, two-weeks off schedule, producing 3.5 million pounds of nickel per month and 2.8 million pounds of copper.

Vale's Sudbury operations produced 85,300 tonnes of contained nickel in 2008, while Voisey's Bay produced 77,500 tonnes. Output last year was down sharply, due to weak demand and the labor stoppages.