Author: Paul Ploumis05 Jun 2014 Last updated at 07:32:11 GMT

ONTARIO (Scrap Monster): Vale SA’s New Caledonian Nickel Plant, holder of the second biggest reserves in the world is all set to resume the nickel production within 10 days, followed by a permission granted by the government to restart the plant operations.

A Toronto based spokesman, Cory McPhee said that the facility would restart in a step by step manner. The operations at the plant have been put on hold after an issue of acid spillage in the plant. On May 30, company said that it had received the permission to restart, According to the U.S. Geological Survey, New Caledonia in the Pacific Ocean have around 16 % of the global reserves, second position goes to Australia.

Nickel prices has surged to a two year high in May as the shutdown of the plant added to rising global supply concern after the world’s biggest supplier, Indonesia banned ore shipment in January. The company planned to deliver a volume of more than 40,000 metric tons this year from its Caledonian nickel plant, formerly called as Goro. This year, as Macquarie Group Ltd. to Citigroup Inc. predicts global deficits, nickel prices are up 37 percent.

A resource analyst at Fat Prophets in Sydney, David Lennox said that the restart would bring the prices down. During Thursday, on LME, nickel for delivery in three months decreased 0.4 percent to $18,945 a ton. Societe Generale SA said that the metal was one of the major three commodities picks for the second half of the year as the Indonesian ban shifts the market from a structural oversupply to a balanced condition.

It is estimated that the demand of the refined metal this year would exceed supply by 36,000 tons and it would be 131,000 tons in 2015. The global mined production is at around 1.9 million tons, when compared to 2.3 million in the year 2013.