Vale to invest $10B in Canada

Vale (VALE-N) says it will close its smelting and refining operations in Manitoba by 2015 because “mineral reserves in Thompson have not been sufficient to operate the smelter and refinery at full capacity for some time.”

Vale has been importing as much as 45% of the nickel processed at Thompson from sources outside the province, and says the external feed will no longer be available after 2013. It also emphasized that its smelting and refining operations would not be able to meet the more stringent sulphur dioxide emission standards that are expected to come into effect in 2015.

But the Brazilian miner, which has come under a lot of flack since its takeover of Inco for cutting jobs in Sudbury, Ont., among other things, softened the blow by announcing plans to spend $10 billion over the next five years on its Canadian operations.

The investment program outlined on Nov. 17 includes previously announced and recently started projects as well as projects that have yet to begin.

In terms of new initiatives, Vale says about $1.5 billion to $2 billion of the funds will be spent on a project to cut sulphur dioxide emissions by more than 80% over current levels. Construction is expected to start in early 2012 and be finished by 2015.

Vale also says it will develop new sources of nickel ore in Manitoba as it transitions from smelting and refining to mining and milling. It is pursuing new mine development opportunities at the Thompson 1-D and Pipe-Kipper deposits and is also continuing an exploration program in the Thompson nickel belt.

Vale says it will also spend $150 million on upgrading its tailings containment facilities in the province.

Elsewhere in Canada, Vale is considering a $2.5-billion to $3-billion potash development project in Saskatchewan that would produce about 2.9 million tonnes of potash a year. Board approval is anticipated in 2012.

On the exploration front, Vale says it intends to announce “in the near future” a strategy and investments for boosting copper production in Canada by 100,000 tonnes, including at its Victor and Capre properties in Sudbury.

“Combined, the mining studies and exploration expenditures in the Sudbury basin represent an investment of more than $50 million in 2011,” it outlined in a news release.