Brazilian miner Vale SA said on Monday it is halting operations at its Onca Puma nickel mine after a state agency suspended its operating license due to alleged non-compliance with local regulations.
According to a securities filing, the impact of the measure on production is still under evaluation.
Vale said the suspension of the license, ordered by Para state’s environment and sustainability department, is also expected to affect suppliers, contractors and customers, but did not provide details.
Para’s environment department said Onca Puma’s license was suspended on Friday due to Vale’s failure to comply with terms of the permit, according to a statement sent to Reuters on Monday.
The department cited an unfulfilled obligation to provide services for communities surrounding the mine, including setting up a fiber optics network and a health unit.
Vale said it is in touch with the department to better understand the technical and legal aspects of the suspension, as well as taking administrative and judicial measures to overturn it.
The miner added that it sees no grounds for the suspension of the license. Vale’s nickel production in Brazil reached 16,000 tonnes in 2020.
Credit Suisse analysts said the suspension was negative for Vale, as the venture accounted for 7.5% of its total nickel production last year. It was “still too early to estimate timing to restart,” they added in a research note.
(By Gabriel Araujo and Roberto Samora; Editing by Mark Potter and Bill Berkrot)