Vale: Chimney Damage Forces Nickel Smelter Closure

SUDBURY, May 12 -- Vale Inco, a subsidiary of Brazilian mining company Vale SA (VALE, VALE5.BR), has shut its Copper Cliff nickel refinery in Sudbury, Ontario, following a partial collapse of a chimney stack, a company spokesman said Tuesday.

A 60-foot extension that was added to the 100-foot stack a few years ago fell Friday, spokesman Cory McPhee told Dow Jones Newswires.

No one was injured and an investigation is under way, he added.

He also said the Ministry of Environment and other regulatory bodies were informed.

"The smelter is not operating while we're looking at the stack," McPhee said.

The Copper Cliff smelter was operating at 50% of its capacity, he added.

He said the smelter will be shut for at least a week until repairs are completed.

United Steelworkers spokesman Wayne Fraser said Vale has informed the union that the smelter will be shut for 10 to 12 days. Fraser said Ontario's Ministry of Labor is investigating the chimney fall.

J.P. Morgan analyst Michael Jansen said the Copper Cliff nickel refinery can produce 70,000 metric tons a year at full capacity.

The Copper Cliff refinery is fed by nearby mines in Ontario, and its nickel matte output is refined into nickel cathode at Vale's Clydach refinery in Wales.

Vale's nickel operations in Ontario and eastern Canada are operating at reduced capacity anyway because of a 10-month-old strike. Vale has been using about 1,200 nonunionized staff and contract workers to ramp up output while the strike continues.

Arbitrated talks between Vale and union representatives to enter negotiations broke down Thursday.

An Ontario court found that blockades to the mines by the union were in contravention of the court's earlier rulings and ordered them disbanded.