Vale New Caledonia Project Produces First Nickel During Tests

RIO DE JANEIRO, Aug. 12 -- Brazilian mining company Vale SA ( VALE | PowerRating, VALE5.BR), the world's second-biggest nickel producer, said its Goro project in New Caledonia in the South Pacific successfully produced its first nickel metal product during tests.

Goro's test period should be completed over the next few months and its refinery may be in production by year-end, Vale said in a statement late Monday.

Goro is a nickel laterite project with capacity to produce about 58,000 metric tons a year of nickel and 4,000 tons of cobalt as a by-product.

Goro was originally expected to start up in mid-2009 but was delayed on a market slump for stainless steel, for which nickel is one of the main raw materials.

An acid spill at the site in April 2009 also delayed the start-up schedule, Vale's nickel unit said at the time.

Goro uses high-pressure acid-leaching technology, which requires rigorous environmental controls.