7 May 2007

Brazilian mining company gives final approval to nickel project in New Caledonia

7:03 am on 7 May 2007

Brazil's Companhia Vale do Rio Doce, or CVRD, has given its final approval to the Goro Nickel project in New Caledonia, despite delays, cost explosions and quarrels with some locals.

CVRD has reviewed the project after acquiring it from the Canadian company, Inco last year.

Production should have begun three years ago with a total budget of 1.5 billion US dollars, but the company now says it plans to start its production in 2008 with a budget of 3.2 billion US dollars.

A Goro Nickel spokesperson, Catherine Guillaume, says many factors contribute to the delay and higher construction costs.

"It is also mainly because of the increase of the cost in raw materials, mainly metals and nickel and platinum etc, all the metal that are used to make the different modules of the project, and also the environmental improvements and investments that have been decided by CVRD that is also part of the increase."

Catherine Guillaume says higher fuel costs have also contributed to the cost blowout.