Vales Goro Nickel to Revise Budget by End of Year

Vales Goro Nickel to Revise Budget by End of Year

Goro Nickel, acquired by Brazil’s Cia. Vale do Rio Doce this week, expects to deliver a revised budget for its $2.15 billion nickel project in New Caledonia on schedule by the end of the year.

A general strike, now in its fifth week, by the 2,000- strong New Caledonian Confederated Union of Workers has had only a limited effect on construction, Jeff Zweig, deputy general manager at the Goro mine, said today in an e-mail. The union wants Goro to replace workers hired overseas with locals.

Vandalism in April and protests by the Rheebu Nuu activist group led former owner Inco Ltd. in June to say the project in the French controlled Pacific territory will be delayed and cost more. Vale acquired Goro when it bought Inco for $13.3 billion.

“We remain on track to deliver the definitive estimate and revised schedule before the end of the year,” said Zweig. A ferry that takes workers to Goro received “minor” damage last week due to protests connected with the general strike, Zweig said. Road access to the construction site remains open, he said.

Nickel reached at least a 19-year high this month as mining companies including BHP Billiton Ltd. struggle to expand capacity to meet demand from stainless steelmakers in China for the metal used for rust-proofing.

Eramet Mines

The strike has also restricted ore supplies to Paris-based Eramet SA’s ferronickel plant on the island, the world’s biggest such plant.

Strikers blocked access to a second of its four mines today, increasing the number of mines that it can’t access to two, said Pierre Alla, chief executive officer of Eramet’s Le Nickel-SLN unit, over the phone. Its smelter continues to operate at two- thirds capacity, he said.

“If we keep operating the plant at this level, we can keep going,” said Alla. “Nothing much has changed.”

Police on Oct. 19 cleared strikers blocking access to the company’s largest nickel mine, Tiebaghi. The mine which was blocked today was operating at 30 percent capacity on Oct. 23.

New Caledonia, smaller in area than New Jersey, has about 25 percent of the world’s known nickel resources, according to the Central Intelligence Agency’s World Factbook.

Rheebu Nuu, which means Eye of the Land, has filed an application with the administrative court in Paris for an injunction against Goro’s construction on environmental grounds.

The judge heard the case yesterday, and has given both sides till Nov. 5 to provide more information, said the activist group in an e-mail today. The court’s decision will be announced Nov. 15, Rheebu Nuu said.

Goro has said the application is without merit and is contesting it.

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