Brazil’s Vale (NYSE: VALE) has begun working on the resumption of operations at its $3 billion Onça Puma nickel mining complex, as the country’s Supreme Court suspended injunctions against the miner earlier this month.
Nickel mining at Onça Puma, in Brazil’s northern Pará state, has been halted since September 2017 as the company failed to undergo a requested environmental impact on local indigenous communities affected by pollution caused by the mine.
The complex, which also had to suspend nickel processing in June this year, produced a record of 7,100 tonnes of nickel in the third quarter of 2017, up 29% compared with the prior three-month period and up 7.6% from the third quarter of 2016, Vale said at the time.
The world’s largest nickel producer
has been in disagreement with the Xikrin and Kayapó tribes since 2012, when the Federal Prosecution Office (MPF)
started a public civil action against Vale and the state of Pará.
The authority contended that operations
at the nickel complex had contaminated the nearby Cateté River and that the
state should not have granted Vale licences for the mine.
Nickel prices climbed
around 75% in the first half of 2018, prompting investment in related
projects. Vale itself decided last year to move ahead with construction of
an underground mine at its Voisey’s Bay nickel mine, located
in Canada’s Atlantic province of Newfoundland and Labrador.
It also suspended the sale of a stake in another of its
nickel mines — New Caledonia, located on the remote South Pacific island.
Prices have fallen since and remain
volatile because of oversupply, despite the metal’s key role in lithium-ion
batteries that are used in electric cars.
The nickel sector is becoming a
two-tiered market, with a weaker outlook for materials bound for the stainless
steel industry and robust demand growth in the electric vehicles (EV) sector
that will support prices, according to Goldman Sachs Group.
Brazil holds nearly 13% of the world’s nickel reserves and Onça Puma accounts for about 11% of Vale’s nickel production.
In a separate statement, Vale announced Tuesday that it would invest R$190 million (around $46m) in plans to reconstruct and develop the communities of Macacos (Nova Lima), Barão de Cocais, and Itabirito, which were impacted by a deadly dam burst at the company’s Córrego do Feijão mine in January. The accident unleashed a torrent of thick mine waste that killed more than 250 people.
The miner said the funds will be allocated mainly
to construction and refurbishment of public facilities, cleaning and dredging
of watercourses, construction of schools, as well as improvement of social and