Vale Update on Nickel Production in Q2
Production at VNC reached 5,200 tonnes in 2Q19, while production of finished nickel from VNC totaled 5,900 tonnes in 2Q19, the differences stemming from the time required for processing into finished nickel. External feed purchased from third parties and processed into finished nickel in its Canadian operations. Production of finished nickel reached 45,000 tonnes in 2Q19, 17.9% lower than 1Q19 and 32.0% lower than 2Q18. The decrease was mainly due to scheduled and unscheduled maintenance activities at the Copper Cliff Nickel Refinery, in Sudbury, as well as at the Clydach, Matsusaka and Long Harbour refineries, along with lower production from VNC. Nickel sales volumes were 57,500 tonnes in 2Q19, 14.3% higher than in 1Q19. Efforts were made to optimize supply chain opportunities and draw down regional inventories in-line with demand. Due to the lower production volumes in the quarter, also reflecting Onça Puma’s stoppage, Vale’s revised nickel production guidance is 210,000–220,000 t in 2019.
Canadian operations - During 2Q19, production of finished nickel was impacted by scheduled and unscheduled maintenance activities at North Atlantic refineries. Production has resumed at those refineries and is currently operating at normal rates. Notwithstanding the above-mentioned effect, there were no impacts at the upstream (mine-mill- smelting) activities in the North Atlantic, which operated as planned during the quarter and whose feed will be refined regularly in the next quarters. Production from Sudbury source ore reached 9,600 tonnes in 2Q19, 23.8% lower than 1Q19 and 27.8% lower than 2Q18. Sudbury production was lower due to the above-mentioned unscheduled maintenance activities at Copper Cliff Nickel Refinery that took the plant offline for the month of June and scheduled maintenance activities at the Clydach refinery in Wales that limited refinery production to approximately 50% for over two months. Production from Thompson source ore reached 2,600 tonnes in 2Q19, 16.1% lower than 1Q19 and 55.2% lower than 2Q18. The production decrease was mainly due to the fact that, as Thompson shifted to a mine-mill operation in 2018, its feed is being processed at the Copper Cliff and Clydach nickel refineries, which were faced with the above-mentioned scheduled and unscheduled maintenance in 2Q19. Production from the Voisey’s Bay mine source reached 8,500 tonnes in 2Q19, 16.7% lower than 1Q19 and 10.5% lower than 2Q18. Production was lower than in 1Q19 due to the Long Harbour refinery carrying out both scheduled and unscheduled maintenance in June. Production was lower than in 2Q18 as, in addition to the above-mentioned maintenance, in 2018 there was still some Voisey’s Bay concentrate inventory being consumed at the Copper Cliff Nickel Refinery.
Indonesian operation - Production of finished nickel from PTVI reached 13,200 tonnes in 2Q19, 15.9% lower than 1Q19 and 25.8% lower than 2Q18. Production was lower than in 1Q19 due to the scheduled maintenance activities at both the Matsusaka and Clydach refineries. Nickel in matte production at the PTVI site reached 17,600 tonnes in 2Q19, 34.4% higher than 1Q19 and 6.9% lower than 2Q18. Production was higher in 2Q19 due to the completion of scheduled maintenance related to the Larona canal relining work and electric furnace operational issues that led to an unscheduled maintenance shutdown in 1Q19.
New Caledonia operation - Production of finished nickel from VNC reached 5,900 tonnes in 2Q19, 6.3% lower than 1Q19 and 37.2% lower than 2Q18. As reported in 1Q19, production decreases were due to the limited production at the VNC site due to the proactive maintenance approach currently underway to improve the performance of the assets. The time taken to complete this initiative has been extended due to more work being conducted than originally planned. Production of nickel oxide and nickel hydroxide cake at the VNC site reached 5,200 t in 2Q19, 3.7% lower than 1Q19 and 30.7% lower than 2Q18. Site production decreased in line with source-based production due to the above-mentioned maintenance program. Nickel oxide represented 80% and nickel hydroxide cake 20% of VNC’s 2Q19 site production.
Brazilian operation (Onça Puma) - Production reached 3,900 t in 2Q19, 9.3% lower than 1Q19 and 30.4% lower than 2Q18. The decreases were mainly due to lower feed grades. Mining activities were suspended in September 2017 and the plant has been processing solely stockpiled ore since. More recently, since June 2019, Vale suspended its nickel processing activities at the Onça Puma plant in light of a decision made by a Brazilian court demanding the suspension of ore processing activities. Vale continues to challenge and appeal the suspension decisions with the support of seven reports from appointed experts.
Source : Strategic Research Institute