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Friday, May 9, 2014
Nickel at two-year high after Vale suspends Goro plant
Mining giant Vale SA (NYSE:VALE) suspended production at its New Caledonia's Goro nickel processing plant and mine due to an effluent spill,Reuters reported on Thursday.
The president of New Caledonia's Southern Province, Cynthia Ligeard, ordered Brazil's Vale, the world's second biggest nickel producer, to halt operations immediately, after an estimated 100,000 litres of effluent ended up in a creek, according to Radio New Zealand International (RNZI).
The provincial government and the environmental authority have sent a joint mission to evaluate the state of the US$6 billion plant.
Vale said in response the spill was due to a misconfiguration of the circuits transferring solution and he water quality of the creek is now back to normal.
The Goro mine had been targeting to produce about 40,000 tonnes of nickel this year, out of a total worldwide production of about two million tonnes.
Earlier this week Glencore Xstrata said output at its Koniambo mine, also in New Caledonia, had been disappointing, and that its 26,000-tonne production forecast for this year was being reviewed.
Nickel prices hit a two-year high in London Metal Exchange on Thursday morning, reaching $19,786, the biggest one-day gain in nearly four years, over supply concerns including Indonesia's ban on nickel early this year.
According to Bloomberg Deutsche Bank analysts expect nickel to peak at $27,000 a metric ton in 2017.
Despite being one of the best-performing commodities this year, with prices rising over a third since January, nickel doesn't seem to be in the cards for diversified giant Anglo American (LON: AAL).
The miner said Thursday it is mulling the sale of its Brazilian nickel unit to Vale, the South American country’s largest miner, as part of its ongoing efforts to swing back to profit.