UPDATE 1-Vale back at work on Ontario nickel project
By Allison Martell and Euan Rocha
TORONTO, March 3 (Reuters) - Vale SA's Canadian unit has resumed work on its Copper Cliff Deep nickel project in the Sudbury basin and expects to complete a feasibility study by the end of the year, a company executive said on Monday.
The project is expected to cost somewhere in the range of a billion dollars to build and could be one of the unit's lower-cost operations, said Kelly Strong, Vale's vice president of Ontario and UK operations.
If it goes ahead, the revised project, now dubbed Copper Cliff Mine, would be another boost for the Sudbury basin in northern Ontario, where Vale recently opened Totten, its first new mine in more than 40 years.
"It's going to look a little bit different than the original project - it's going to be three phases," said Strong.
The project would merge and expand what are now two separate mines. Its earlier incarnation was put on hold in the wake of the 2008 financial crisis. In 2010, Vale Canada said it was re-evaluating the project, though work did not proceed.
The first of the three phases could start producing within the next two to three years, Strong told Reuters. A final go-ahead will depend on the project securing a green light from Vale's board in Brazil.
Mining companies from around the world are in Toronto this week for the Prospectors and Developers Association of Canada convention, which is the industry's largest annual gathering.
Strong, who leads Vale's operations in the Sudbury basin, also played down expectations that the Brazilian miner would reach a deal early this year with rival metals producer and trader Glencore Xstrata Plc to merge their adjacent Canadian nickel projects.
"Last year we had some conversations," he said. "We had committed to getting back together and having conversations in '14, but that hasn't occurred yet and there's really nothing new to report at this time."
Strong made clear that while the talks had not yet been held, further discussions were expected, adding there was no specific reason for the delay.
Depending on the details of a potential deal, analysts said a tie-up could mean substantial savings for both miners, if all or a part of their mining, milling and even smelting operations are brought together.
The price of nickel has begun to tick higher this year and is currently trading at around $14,674 a tonne, up from around $13,900 a tonne at the end of 2013, after a ban that Indonesia imposed in January on unprocessed mineral exports.
In December, Vale's Chief Executive Officer Murilo Ferreira announced that it was likely the company would reach a partnership deal with Glencore about their adjacent nickel projects in the first quarter of 2014.
Reuters had initially reported in October that the mining giants were in talks about a potential combination of their Sudbury basin nickel operations, as part of an effort to reduce mining costs.