The Brazilian power grid operator ONS has declined the miner’s request to increase power consumption.
Vale’s ambition to augment its nickel output at the Onca Puma complex in Brazil has encountered a significant hurdle.
The Brazilian power grid operator ONS has declined the miner’s request to increase power consumption, essential for the operation of a new furnace as part of a $555m expansion project, reported Reuters.
This decision comes at a critical juncture as Vale aims to start the second furnace later this year, intending to boost its global nickel production significantly by 2030.
ONS documents revealed that Vale sought a power consumption increase to 200MW at the start of this year.
Despite previous attestations of viability, Vale missed the deadline to sign the necessary contract, leading to the denial of its request, the report said.
The power initially sought by Vale has since been allocated to another project in ONS’ pipeline.
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In response to the setback, Vale is actively exploring “technical alternatives” with ONS.
The company remains optimistic about resolving the issue promptly, maintaining its outlook to begin operating the new furnace in the second half of the year.
The expansion is expected to contribute an additional 15,200 tonnes (t) to Vale’s annual nickel output.
Currently, the Onca Puma complex has a nominal capacity of approximately 27,000 tonnes per annum (tpa), contributing around 10% of Vale’s total nickel production.
The expansion is a key component of Vale’s strategy to increase its global nickel production from around 160,000t last year to as much as 250,000t by 2030.
Amidst these developments, Vale reported a 17% decrease in net income for the first quarter of 2025 (Q1 2025), ending 31 March.
The decline to $1.39bn from $1.67bn a year earlier is primarily attributed to lower iron ore prices.
Net operating revenues also saw a 4% decrease year-on-year, totalling $8.1bn, compared with $8.45bn in Q1 2024.
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