The opinions expressed here are those of the author, a columnist for Reuters. May 29 (Reuters) – It’s hard not to have a grudging respect for Brazil’s Vale when it comes to the company’s Goro nickel project in New Caledonia. Others would surely have walked away from what must be one of the most problematic start-ups in the history of base metals.
Over-budget and years late even before the plant was first switched on in 2010, it has since been plagued by technical set-backs, unscheduled closures and, now, violent attack by locals. Vale has remained commendably undaunted throughout.
Yet each new start has swiftly been followed by new adversity. Even rebranding the operation as Vale New Caledonia (VNC), that tried-and-tested corporate exercise in drawing a line under historical problems, hasn’t worked.
Goro, using the relatively new high-pressure-acid-leach (HPAL) technology, continues to defy Vale’s boundless optimism and to drain money from its bottom line.
Until Jan. 12 this year it was, however, just Vale’s problem. But in the wake of the Indonesian nickel ore ban that kicked in on that date, Goro risks becoming a bigger problem for the entire nickel market.
GORO’S TROUBLED HISTORY
Vale inherited the Goro project when it bought Canadian nickel producer Inco back in 2006.
It was originally slated to come into production by the end of 2008 but it was a full two years later before the plant was fired up. By which stage the capital costs had ballooned from $3.2 billion to $4.3 billion.
The problems started almost immediately, an acid spill halting commissioning in April 2010.
It was only in Q1 2011 that Vale booked the first finished product against Goro, which is designed to produce nickel oxide for further refining into utility nickel at Vale’s refinery in Dalian in China.
Since then there have been repeated technical issues with the plant, particularly the acid circuit, most seriously in 2012 when the whole facility was out of action for the best part of six months.
Originally scheduled to ramp up to full 60,000-tonne per year capacity over a three-year period, Goro has in fact generated just under 30,000 tonnes of finished product in the three years since first production.
And now it’s closed again. Another acid leak and a more serious one since this time it was not contained within the plant but rather contaminated a local river.
For the rest of this article, click here: http://in.reuters.com/article/2014/05/29/home-nickel-idINL6N0OF2Y120140529