Vale to shutter nickel mine in Canada; up to 200 jobs at stake

A view shows the company logo of Brazilian mining company Vale SA at its headquarters in downtown Rio de Janeiro August 20, 2014. REUTERS/Pilar Olivares/File Photo

(Reuters) - Vale Canada said on Tuesday it would suspend operations at its Birchtree nickel mine in the province of Manitoba on Oct. 1 because of weak nickel prices and declining ore grades as the small, 51-year-old mine nears the end of its life.

The suspension will result in up to 200 job losses and a 6,000 tonne-a-year reduction in nickel from Vale’s Manitoba operations, Vale Canada said in a statement.

Brazil’s Vale, the world’s biggest nickel producer, also operates the Thompson mine, mill, smelter and refinery in Manitoba. It also operates nickel mines elsewhere in Canada, notably in Sudbury in Northern Ontario.

Vale is looking at offsetting the lost production with increased output at the Thompson mine.

“We remain committed to a long-term mining and milling future in Thompson,” Mark Scott, vice president of Vale’s Manitoba operations said, detailing around $100 million of planned investments in upgrades at the complex.

Nickel prices have fallen nearly 70 percent in the past six years on a supply glut.

Reporting by Nicole Mordant in Vancouver; Editing by Bernard Orr