Vale (NYSE: VALE), the world’s top producer of nickel and iron ore, is fine-tuning details to reopen its Voisey’s Bay open pit nickel mine and concentrator in Canada, next month.
Full capacity at the northern Labrador-based operation should be reached in August, the Brazilian mining giant said today.
Vale initially placed Voisey’s Bay mine on care and maintenance for four weeks as a precaution amid the fast-spreading coronavirus pandemic. It later extended the measure for up to three months, leaving an ongoing mine expansion project on hold.
In 2015, Vale launched the Voisey’s Bay Mine Expansion (VBME) project to promote the transition from open pit to underground mining. Construction began in 2016 and is expected to be completed by 2022.
The VBME project is expected to extend the mine life of Voisey’s Bay, with annual underground mine production of 45,000 tonnes nickel in concentrate on average, as well as about 20,000 tonnes copper and 2,600 tonnes cobalt.
Vale noted there had been no coronavirus cases registered at the mine to date. It added it was partnering with a private testing lab in Newfoundland & Labrador to provide extensive polymerise chain reaction (PCR) testing to all employees. It would also trace contacts for any Covid-19 cases.
Last year, Voisey’s Bay mine produced 25,000 tonnes copper concentrate.
Vale warned in April that it expected the nickel market to enter a surplus later this year, compared with its previous view of continued deficits.
Its long-term outlook, however, remains positive due to factors including demand for nickel in the batteries that power electric vehicles (EVs).
Commerzbank analyst Daniel Briesemann said that while mines will close or remain suspended for longer than expected, the negative impact of the coronavirus would be particularly seen in the demand side.
“The nickel market could be well oversupplied this year,” he said in a recent note.
Vale has two nickel projects in the pipeline in Indonesia, which it plans to develop with joint venture partners.
The Bahodopi project is slated to produce 70,000 tonnes per year ferronickel and is being developed with Chinese partners.
Vale is also working with Japan’s Sumitomo Metal Mining in Pomalaa for a processing plant. The facility aims to churn out 40,000 tonnes a year nickel that is suitable for batteries.