Vale closing Birchtree nickel mine in Manitoba

Vale closing Birchtree nickel mine in Manitoba

Vale's operations in Thompson, Manitoba.

World number two nickel miner Vale (NYSE:VALE) announced in a letter to employees on Monday it's placing it Birchtree nickel mine in Canada's Manitoba province on care and maintenance at the beginning of October.

The Thompson Citizen reports the suspension will result in about 150 employees at Birchtree being cut and up to 50 additional jobs in downstream processing, service and support functions will also be affected.

The shuttering of the small mine in operation since 1968 will result in a 6,000 tonnes a year reduction in nickel output from Vale's operations in Manitoba, but the Brazilian company is also investing $100 million to upgrade the Thompson mining complex in the province.

The suspension of operations is blamed on a weak nickel price which is down 22% from its November highs. The price of steelmaking raw material fell to a ten-month low below $9,000 tonne this week on the back of higher exports by Indonesia and the Philippines, top suppliers to China.