Vale nickel furnace expansion reshapes Brazil’s ferro-nickel landscape

Vale

Vale nickel furnace expansion is set to change the balance of ferro-nickel supply in Brazil and beyond. The new unit at Onca Puma adds 15,000 t/yr of capacity and lifts nameplate output by 60pc to 40,000 t/yr. As a result, the operation now stands as Brazil’s largest ferro-nickel producer and a more visible player in global stainless steel and battery supply chains. Vale nickel furnace expansion therefore reinforces the company’s strategic pivot toward higher-value base metals at a time of growing long-term demand for nickel in EVs and energy storage.

Vale nickel furnace expansion supports long-term growth targets

Vale nickel furnace expansion directly underpins the group’s near-term and long-term production targets. The company expects total nickel output to reach 150,000-175,000t this year, and it plans to lift production to 210,000-250,000 t/yr by 2030. This growth will come from additional capacity at Onca Puma and the ongoing ramp-up of underground production at Voisey’s Bay in Canada. Therefore, Vale nickel furnace expansion is part of a broader multi-asset strategy rather than a stand-alone upgrade. At the same time, Vale plans to build inventories ahead of planned maintenance at its Canadian sites, including five weeks of work at the Creighton mine in the third quarter and shorter outages at Thompson and Long Harbour. This pre-emptive stock build should help smooth customer deliveries and protect contractual reliability despite temporary disruptions.

Cost base improves as ferro-nickel capacity scales

Vale’s nickel business is also becoming more competitive as unit economics improve. The company reports global all-in nickel costs of $12,936/t, down from around $15,000/t a year earlier. Lower costs reflect operational efficiencies, better asset utilisation and the scale benefits associated with projects like the Onca Puma expansion. As a result, Vale can withstand periods of weaker nickel prices while still supporting capital spending on strategic growth assets. This cost profile matters for stainless steel mills and battery supply chain customers that are increasingly sensitive to both price and ESG performance when selecting long-term partners. Over time, expanded ferro-nickel capacity in Brazil could provide more diversified supply options for global buyers seeking to reduce dependence on a narrow set of producing regions.

The Metalnomist Commentary

Vale nickel furnace expansion at Onca Puma reinforces the company’s position as a core supplier to stainless and future battery markets. The combination of higher nameplate capacity, lower unit costs and diversified production between Brazil and Canada makes Vale a pivotal player in the next phase of nickel supply growth. For downstream consumers, the key question will be how this new capacity interacts with evolving nickel demand from EVs and potential structural oversupply in certain market segments.