Vale's nickel production fell 15% in 2019 on lower source ore

SHANGHAI, Feb 18 (SMM) – Brazilian mining giant Vale said its finished nickel production fell 15% from 2018 to stand at 208,000 mt in 2019, primarily due to reduced feed from third parties, lower source ore from Thompson and VNC, according to a prodcution and sales report of the company. 

Nickel operations were also impacted last year due to maintenance shutdowns at the North Atlantic refineries, which have been resumed and are now operating at regular rates.

The refining activities in VNC responsible for processing the feed into nickel oxide will cease from April 2020 onwards, as part of the process to improve short-term cash flow. With this flowsheet simplification, VNC's nickel product mix will be solely comprised of nickel hydroxide cake.

In the fourth quarter of 2019, production of finished nickel reached 56,700 mt, 10.3% higher on the quarter and 11.4% lower on the year. The increase over Q3 was mainly due to the resumption of regular production at Onça Puma and the ramp-up in production at the Copper Cliff and Clydach refineries after maintenance activities.

Nickel sales volumes stood at 47,000 mt in Q4 2019, down 7.7% from Q3, as a result of management's decision to retain inventory for better market conditions. Overall, 2019 sales volumes were 205,700 mt, down 13% on the year, reflecting lower production levels.

Vale's nickel production guidance stands at 200,000-210,000 mt in 2020.

Production

Sales

Canadian operations

The Copper Cliff and Clydach refineries were operating at regular rates for the full fourth quarter last year, positively impacting production in the period, after going through scheduled and unscheduled maintenance activities earlier in the year.
Production from Sudbury source ore reached 15,300 mt in Q4, 15% and 8.5% higher on a quarterly and yearly basis, respectively, reflecting the full return to operation at the Copper Cliff and Clydach refineries in Q4. The higher production compared with Q4 2018 was mainly due to strong performance at Sudbury.

Indonesian operation (PTVI)
Production of finished nickel from PTVI stood at 20,700 mt in Q4 2019, 11.9% and 4% higher than Q3 2019 and Q4 2018, respectively. Production was higher on the quarter as the Clydach refinery returned to full operation after the previously scheduled and unscheduled maintenance activities in the prior quarters, leading to higher consumption of PTVI source material.

New Caledonia operation (VNC)
Production of finished nickel from VNC reached 4,800 mt in Q4 2019, 25% and 42.2% lower than Q3 2019 and Q4 2018, respectively. The decline in production was due to the limited availability of process plant operational assets. 
Production of nickel oxide and nickel hydroxide cake at the VNC site came in at 6,900 mt in Q4, up 9.5% on the quarter but down 21.5% on the year. Nickel oxide represented 79% and nickel hydroxide cake 21% of VNC's Q4 site production.

Brazilian operation (Onça Puma)
Production at Onça Puma reached 3,300 mt in Q4, reflecting an increase of 3,200 mt compared to Q3 but 40% lower than Q4 2018. Mining activities in Onça Puma had been suspended since 2017. Production was higher on the quarter, due to a favourable decision by the courts that allowed both mining and processing activities to be resumed in September 2019.