No Date For Vale To Restart Ontario Nickel Mines After Death

Feb. 2 -- Brazilian miner Vale SA (VALE, VALE5.BR), the world's biggest nickel producer, said late Tuesday it has no date set to restart mine production at its nickel mines in Ontario after a fourth death at the company's Canadian mines in seven months.

"We're taking a step back to refocus on safety," said Cory McPhee, spokesman for Vale's Canadian operations. "We can't anticipate the impact on production. We will monitor the situation going forward."

Vale has started an investigation into Sunday's death of a worker at the Coleman mine in Sudbury, and will also examine deaths at the nearby Stobie mine, and the Thompson, Manitoba, mine, last year, McPhee said. The death followed a fatal accident at the Thompson, Manitoba, mine in October and two mine workers deaths at the Stobie mine in June.

Prior to these accidents, the last fatality at the Canadian nickel mines was in 2006, before they were bought by Vale from Inco Ltd., the spokesman said.

Vale shut down the mines in the Sudbury Basin after Sunday's accident, but said that won't impact nickel processing at the Clarabelle mill, and the Copper Cliff smelter and nickel refinery, which has sufficient raw material for the time being.

The five Sudbury mines--Coleman, Stobie, Creighton, Garson and Copper Cliff North--also produce copper and some precious metals as by-products. They accounted for just under a third of Vale's total nickel metal output of 58,000 metric tons in third quarter 2011, as well as about a third of its copper output, nearly half its cobalt, and its entire platinum, palladium, gold and silver output.

Vale's nickel mines in Manitoba, Newfoundland and Labrador, which account for another third of its output, continue to produce, McPhee said. Vale also produces nickel in Indonesia, Brazil and is starting production operations in New Caledonia.

"We have mines (in Sudbury) that are more than a century old, this poses challenges, but this is not an issue related to the age," McPhee said.

Nor can the accidents be linked to a recent 12-month strike over wages at Sudbury, the spokesman said.

Nickel market prices have been in the doldrums recently, amid an oversupply of the raw material, but analysts said investors will still be watching for the impact of mine stoppages.

"In our view, this stoppage should not materially impact Vale's financials," Barclays Capital said in a research note Wednesday. The problems could trigger another strike, which would have more impact, the investment bank said. A strike by 3,000 workers which started in July 2009 lasted for one year, Barclays said.

Officials at United Steelworkers' Union Ontario office had no immediate comment on the situation.

Miner BHP Billiton Ltd (BHP) on Wednesday said it will cut nickel output at its West Australian operations by 30% is due to weak metal prices and the strong Australian dollar.

A BHP spokeswoman said the company will reduce staff numbers at the unit by 155 jobs and slow the mining rate at the Mt Keith operation for about a year. Stock-piled ore will be used to produce nickel concentrate in the short term, BHP said.

Nickel is the main raw material for production of stainless steel, and is also used in batteries.