Vale to mothball century-old Ontario nickel mine

Vale (NYSE:VALE) said a combination of factors led to the closure decision, including metals prices, unprofitable low-quality ore, and recent seismic activity that prevented workers from mining below the 3,000-foot level. About 230 jobs could be affected.

“This is a necessary decision but a sad one,” Stuart Harshaw, Vale’s vice-president of Ontario operations, said in a statement. “Stobie has a rich history and has been integral to our success for more than a century. However, after more than 100 years of operation, the mine is approaching the end of its natural life. The low grades at Stobie are no longer economical to mine in today’s challenging price environment.”

However union officials are hoping that some positions could be saved, through mine employees replacing current contractors on site, as per the collective agreement, Northern Ontario Business reported. Some older miners could be offered pensions. Other employees could be reassigned to other Vale operations in Ontario – Coleman, Totten and Copper Cliff – or the South mine if Vale follows through on plans to re-open it.

The Stobie mine is expected to be put on care and maintenance later this year. In 2013 Brazil-based Vale received a record $1.05 million fine for an accident at Stobie that took the lives of two young men. The workers were buried by a torrent of wet mud and ore on June 8, 2011.