Vale Considers Environmental Changes to Goro Nickel Project

Vale Considers Environmental Changes to Goro Nickel Project

Cia. Vale do Rio Doce, the world’s largest iron-ore producer, is considering changes to its $3 billion Goro nickel mine in New Caledonia as it studies plans to cut costs and deal with environmental concerns.

Chief Executive Roger Agnelli visited the French-controlled Pacific island territory last week, and met government and community leaders, spokesman Steve Mitchell said today in an e- mail statement.

Vale acquired Goro, the largest nickel mine under construction, when it bought Inco Ltd. last year, as prices for the material used in stainless steel rose to a record. The cost of building Goro has jumped from $2.15 billion, and it’s been delayed by vandalism and an island-wide strike last year.

“We are considering a number of improvements in environmental performance and other key areas to ensure a cost- effective and sustainable project,” Mitchell said. “We’ve been discussing these with our stakeholders in New Caledonia.”

The Paris Appeals Court last month threw out a suit brought against the mine by the Rheebu Nuu Committee, a group representing traditional chiefs and their communities. Rheebu Nuu did not show that planned tailings dam at the Goro mine violated French mining rules.

Agnelli said in January he wants to get the cost of the project to less than $3 billion and meet local concerns so that the mine could start production in late 2008 or early 2009. Mitchell didn’t say when Vale will finish its review of the project.

Nickel futures prices on the London Metal Exchange reached a record $42,200 a ton, or $19.14 a pound, on March 1, as demand for the metal outpaces supply.


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