Acid spill at Vale Inco's giant $3.2 bn Goro nickel project

Acid plant commissioning at Vale's big Goro nickel project in New Caledonia, which is due on stream this quarter, has been halted as an acid spill into the local environment is investigated.

TORONTO (Reuters) - 

Vale's (VALE5.SA: Quote) Inco unit said on Tuesday it has halted commissioning of the acid plant at its Goro nickel project in New Caledonia following an acid spill last week.

Cory McPhee, a spokesman for the Brazilian company's nickel division, said about 2,500 litres (660 U.S. gallons) of acid made it into the environment around the project following the April 1 spill. New Caledonia is an island territory of France in the South Pacific.

Significantly more than that spilled, but was captured in a containment area around the plant, McPhee said.

"Although the investigation is continuing, it appears the leak occurred at an expansion joint in the piping around our acid plant," he said in an e-mail.

While work at the acid plant has been halted, commissioning of the rest of the project is continuing as scheduled, he said.

The project is expected to begin production in the second quarter, but Vale has warned it could alter the timeline depending on market conditions.

Goro was last budgeted at $3.2 billion and is expected to produce 60,000 tonnes of nickel a year.

Vale acquired Canada's Inco in 2006.

($1=$1.24 Canadian) (Reporting by Cameron French; editing by Rob Wilson)

© Thomson Reuters 2009. All rights reserved.

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