Vale Base Metals boosts Onca Puma capacity with new nickel furnace

By Marta Nogueira

RIO DE JANEIRO, Sept 30 (Reuters) - Vale Base Metals has begun operating a new nickel furnace at its Onca Puma complex in northern Brazil, a move the company said would boost the asset's nominal production capacity by 60% and allow it to produce more at lower costs.

The new furnace should help Vale Base Metals deal with current low nickel prices, which it attributes to oversupply from Indonesia, and put the firm in a "very strong position" for when the market recovers, CEO Shaun Usmar told Reuters on Tuesday.

The company will generate "reasonable cash flow" with the expansion, Usmar said, estimating it to increase Onca Puma's production capacity to 40,000 metric tons of nickel per year.

Globally, Vale Base Metals expects to produce between 160,000 and 175,000 tons of nickel this year. The new furnace, along with output from its Voisey's Bay asset in Canada, should help output hit 210,000 to 250,000 tons by 2030.

Onca Puma's second furnace took three years to complete and required around $480 million in investments, below the previously planned $555 million, according to the company.

Vale Base Metals is majority owned by Brazilian miner Vale VALE3.SA, while Manara Minerals - a joint venture between Saudi miner Ma'aden 1211.SE and Saudi Arabia's Public Investment Fund - holds 10% of the firm.

Usmar said Vale Base Metals will continue to invest to expand its presence in Brazil and to strengthen its critical minerals portfolio.

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