Bloomberg News

Vale May Double Nickel Output Capacity at Goro Mine Project

April 25, 2008

Cia. Vale do Rio Doce, the world's biggest iron-ore producer, may double output capacity at its Goro nickel mine project in New Caledonia.

``Goro could potentially be doubled, but no studies have yet started on this,'' Roberto Castello Branco, Vale's investor relations director, said today at a press conference in Rio de Janeiro. ``A second phase could cost much less than the first because the infrastructure has already been built, including a 100 megawatt power station.''

The $3.2 billion project, which also includes a smelter, will start up with initial annual production of 60,000 metric tons of nickel within three years. Vale on April 10 opened a $62 million unit in Dalian, China, to process Goro's nickel to sell in the domestic market.

Vale Chief Executive Officer Roger Agnelli, who wants Vale to overtake BHP Billiton Ltd. as the world's biggest mining company, is spending $59 billion over five years to expand beyond its main iron-ore operations.

Vale will open its first Brazilian nickel project, called Onca Puma, in the first half of next year. The 58,000-ton-a-year project cost $2.3 billion to develop, more than the initial estimate of $1.4 billion, because of rising expenses for machinery and raw materials, Castello Branco said.

The investment needed to complete Vale's Salobo copper in northern Brazil project also climbed, to $1.15 billion from a previous estimate of $897 million, he said in a conference call with analysts today.

The mine, set to produce 100,000 tons a year of copper, could be further expanded to 200,000 tons, Castello Branco said.

To contact the reporter on this story: Diana Kinch in Rio de Janeiro

To contact the editor responsible for this story: Steve Stroth at

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