Vale’s New Caledonia nickel plant under siege, up to $30m in damage

Vale’s New Caledonia nickel plant under siege, up to $30m in damageDozens of rioters have caused tens of millions of dollars in damage to vehicles, equipment and buildings at Brazil’s Vale (NYSE:VALE) nickel plant in New Caledonia, as anger boiled over at a chemical spill into a local river.

Earlier this month the country’s government ordered Vale to shut down its US$6 billion nickel facility at Goro, in southern New Caledonia after an estimated 100,000 litres of acid-tainted effluent ended up in a creek, killing thousands of fish.

Vale’s plant has a production target of 60,000 tonnes of nickel at full capacity, compared with global supply of around 2 million tonnes. But it has been beset by problems in recent years, including several chemical spills and violent protests.

Peter Poppinga, an executive director at Vale, told Les Nouvelles Caledoniennes newspaper (in French) that damage to the mining site was estimated to be between $20 million to $30 million, including the destruction of almost a third of the truck fleet.

"If there is no activity for several months, we will shut the plant, but that's not the case. The closing of the plant is not on the table," Poppinga was quoted as saying.

Vale’s New Caledonia nickel plant under siege, up to $30m in damage

Attack against Vale’s plant by Thierry Perron | Les Nouvelles Caledoniennes. See full slideshow here.

Nickel mining is a key industry in New Caledonia, which holds as much as a quarter of the world's known reserves. Vale's plant is the second-largest employer in the southern province, with some 3,500 employees and contractors.

Prices spiked on the news, which hinted the plant will have to remain closed longer than expected. Three-month nickel on the London Metal Exchange gained 0.7% to $19,735 a tonne by 0623 ET.

Vale’s New Caledonia nickel plant under siege, up to $30m in damage