Bloomberg reported that Vale SA resumed production at its Thompson mine and refinery in Manitoba after maintenance as world nickel prices declined because of slackening demand.

Mr Cory McPhee spokesman for Vale’s nickel unit in Toronto said that the plant is now up and running after a 1 month stop for the scheduled work. Output at Vale’s 2 other Canadian nickel mines at Sudbury and Voisey’s Bay remains halted because of a strike.

Vale stopped operations at Thompson on August 1st 2009 the same day a strike halted its Voisey’s Bay nickel plant in Newfoundland. Output at Sudbury, Vale’s largest Canadian mine in Ontario stopped on July 13th 2009 after a company proposal on benefits was rejected by unionized workers. There are no new talks scheduled.

Mr Marcos Assumpcao Sao Paulo based analyst with Itau Unibanco Holding SA said that “The Thompson restart may bring negative sentiment to the nickel market. Nickel is experiencing temporary demand weakness on slightly higher than average stainless steel stocks.”

Nickel is a raw material used in the production of stainless steel. London Metal Exchange 3 month nickel prices recently stood at USD 17,950 per tonne, 12% lower than their August 13th 2009 high of USD 20,605 per tonne.

According to the company’s annual production report, in 2008 Thompson provided 28,900 tonnes of Vale’s Canadian nickel production of 191,700 tonnes.

(Sourced from Bloomberg)