New Caledonia to allow Vale's nickel mine to restart

by Reuters
Friday, 30 May 2014 06:47 GMT

* $6 bln plant closed three weeks ago after effluent spill

* Spill, response sparked violent protests

* Independent report says no objection to mine restarting

* Mine closure has added to nickel supply concerns (Add quotes, background, detail on report)

By Cecile Lefort

SYDNEY, May 30 (Reuters) - New Caledonian authorities will allow mining giant Vale to restart nickel mining activities as early as Friday after suspending operations at the $6 billion plant more than three weeks ago due to an effluent spill.

Youths angry about the spill and the reaction from Kanak tribal elders in the South Pacific island torched vehicles and buildings at the Goro mine site, blocked roads and injured three policemen in violent protests that followed.

In early May, some 100,000 litres of acid-tainted effluent leaked from the troubled plant and into a river, killing about 1,000 fish.

"The president of the Southern Province will issue by the end of the day or in the next few days an authorisation to restart the mining activities," a spokeswoman for the province told Reuters by telephone from the French-administered island.

The decision to re-open the mine came after an independent expert's report submitted earlier this week to the southern provincial authorities said it was not opposed to the restart of the operations.

The independent report was submitted by "Institut National de l'Environnement Industriel et des Risques", a national environmental safety body. It recommended the reinforcement of security measures, an audit of safety management and the establishment of a multi-party surveillance committee.

Some protesters had sought the permanent closure of the mine, which has a history of environmental problems and objections from locals. Vale said earlier this week that closing the facility was not on the table.

The stoppage had affected around 3,500 workers, Vale said, of which 1,300 are employees and the rest subcontractors.

Vale could not be immediately reached for comment on when the mine would resume production. The world's second biggest nickel producer, Vale said in November that it expected Goro to produce 40,000 tonnes of nickel in 2014. But it has been beset by problems in recent years, including several chemical spills and violent protests.

LME nickel was trading down 0.4 percent at $18,823 a tonne on Friday but is up by more than 35 percent this year amid supply concerns. (Additional reporting by Melanie Burton; Editing by Lincoln Feast and Richard Pullin)

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