VALE recently announced a CAD 150M (USD 121M) investment that will help extend its mining activities in Thompson, Manitoba by a decade. Meanwhile, the company will continue the aggressive exploration drilling for known orebodies and search for new mineralization as it believes that the operations have scope beyond 2040. Notably, this is the largest single investment by the company made in the Thompson operations in the past two decades.
The expansion is a two-phase project and the current announcement represents Phase 1. It includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are likely to improve current production by 30%.
Meanwhile, an ongoing strike since Jun 1, 2021 at Vale’s Sudbury operations in Canada has impacted nickel supply. Declining supply along with lower warehouse levels and high demand has led to higher nickel prices lately. Nickel prices are at around USD 18,356.50 per ton, up 10.9% year to date. The long-term outlook for nickel continues to be positive as its use in electric vehicle batteries will become an increasingly important source of demand growth.