CVRD invests big in Canadian nickel (November 05, 2007)

In the largest annual investment program ever undertaken by a mining company, Companhia Vale do Rio Doce has approved a budget of US$11 billion for 2008 — a portion of which will be channelled into nickel projects in Canada.

CVRD’s Sudbury, Ont.-based Totten mine will receive US$66 million for development. The new nickel mine in northern Ontario will cost a total of US$362 million and is forecast to start production in the second quarter of 2011.

The mine will have the capacity to produce 8,200 tonnes nickel, 11,200 tonnes copper and 82,000 oz. precious metals (platinum, gold and silver) per year.

The second-largest metals and mining company in the world has outlined a further investment in 2008 of US$110 million to build a nickel refinery at Voisey’s Bay in Labrador and Newfoundland. The nickel refinery is slated to produce 50,000 tonnes nickel per year.

Operations are forecast to begin in the fourth quarter of 2011 at a total project cost of US$2.17 billion.

Currently, the nickel concentrate produced at Voisey’s Bay is shipped for smelting and refining to CVRD’s operations in Thompson, Man., and Sudbury, Ont. The copper concentrate is then sent directly to clients.

CVRD is also boosting its investment in New Caledonia in the South Pacific. Its Goro project — which began construction this year — boasts one of the largest deposits of lateritic nickel in the world.

CVRD plans to invest US$723 million there next year. Operations are slated to begin at the end of 2008.

Goro is expected to have a production capacity of 60,000 tonnes nickel and 4,600 tonnes cobalt per year. The project has an estimated capex of US$3.2 billion.

Closer to home, CVRD plans to invest US$581 million next year on Ona Puma in the Brazilian state of Para and US$91 million on its Vermelho mine in the mineral province of Carajas.

Ona Puma will exploit deposits of nickel laterite and should reach a capacity of 58,000 tonnes nickel per year. Production is forecast to begin in January 2009.

The Vermelho mine will produce around 46,000 tonnes of metallic nickel per year. The mine is expected to be complete in the first quarter of 2012.