Worth pondering.CVRD To Focus On Doubling Nickel Output In 4-5...

Worth pondering.

CVRD To Focus On Doubling Nickel Output In 4-5 Years - Executive6-11-07 12:40 PM EDT | E-mail Article | Print ArticleLONDON -(Dow Jones)- Brazilian mining giant Companhia Vale do Rio Doce (RIO), or CVRD, intends to focus new investment on nickel production to double output over the next four to five years, executive director, ferrous metals, Jose Carlos Martins said Monday.


To take production to 500,000 metric tons a year, the company intends to invest close to $2 billion a year over the next four years, with resources - both financial and mineral - already accounted for, Martins said at the Melbourne Mining Club conferece in London.

The miner is currently finalizing additional capacity at its Voissey Bay facility in Canada, he said.

The mill has a daily capacity of 6,000 tons of ore.

In early May, employees at two of Voisey Bay's contractors went on strike. Production wasn't delayed and workers returned to work late last month, however a backlog of nickel concentrate built up, halting production.

"Labor is an issue in Canada. It's unavoidable, but we are managing it," Martins said.

A shipping vessel of nickel concentrate that was delayed by sea ice is expected to leave the Voisey Bay Nickel Co.'s port Monday to relieve the backlog of nickel concentrate at the port's site storage facilities. The facility has been completely full for nearly two weeks.

Meanwhile, investment for CVRD's Goro project, in the southwestern Pacific French territory of New Caledonia, will come in at $3.1 billion, Martins said.

The company's capital expenditure budget for 2007 is $7.4 billion.

Goro is one of the world's largest nickel mines currently under development, with expected production capacity of 60,000 tons a year.

The mine is seen as a key swing factor in the critically tight nickel market, as well as a key foothold for CVRD in its expansion in the Asia Pacific region.

CVRD inherited Goro through its $17.6-billion purchase of Canadian nickel miner Inco in October.

CVRD expects to produce 287,000 metric tons of nickel in 2007, up from pro- forma output of 251,000 tons in 2006. In October, the company completed its $ 17.6 billion purchase of Canadian nickel miner Inco.

-By Melanie Burton, Dow Jones Newswires; +44 (0)20 7842 9412; melanie.burton@ dowjones.com


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06-11-071240ET
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