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Vale wins battle to restart Onca Puma ops in Brazil as nickel prices soar

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Vale wins battle to restart Onca Puma ops in Brazil as nickel prices soar

London — Brazilian miner Vale is to resume mine and plant operations at its Onca Puma nickel mine in Para state in northern Brazil, the miner announced late Thursday.

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This follows a ruling by the President of Brazil's Supreme Federal Court (STF) to suspend existing injunctions against operations at the site at Ourilandia do Norte, Vale said in a statement.

"With this decision, the operation, which has had its mines paralyzed since September 2017, and its nickel processing plant since June this year, will resume its activities," Vale said.

The processing and mining operations were suspended by Brazilian court orders amid allegations of pollution at a nearby river..

The STF also ordered the release of judicial deposits for the indigenous Xikrin do Catete and Kayapo communities, which had been blocked by a decision of a regional Federal Regional Court (Tribunal Regional Federal da 1 Regiao), Vale said.

Vale on Friday said it had no comment on the quantities expected to be mined and processed at the site.

Nickel production at Onca Puma reached a record 7,100 mt in the third quarter of 2017, up 29% compared with the prior three-month period and up 7.6% from Q3 2016, mainly due to strong plant performance with high productivity, Vale said at that time.

Between September 2017 and the processing ban in June, the company had continued to process nickel ore at the Onca Puma plant that was produced and stored at the site before the mining ban was enforced, it said.

Colin Hamilton, an analyst with BMO Global Commodities Research, said in a note Friday that "following the recent rally, the entire nickel market is now making money - a big turnaround from early 2016 when [less than] 40% were. With the potential for raw material constraint, we expect this will persist over the coming couple of years at least."

Over the past month, the cash London Metal Exchange price for nickel has jumped to $18,175/mt from $15,630/mt.

-- Diana Kinch, newsdesk@spglobal.com

-- Edited by Keiron Greenhalgh, newsdesk@spglobal.com