It is reported that TSX listed FNX Mining could temporarily halt some or all of its mining operations in Canada's Sudbury Basin later this year, after larger rival Vale Inco announced it will close its own mines and processing facilities for eight weeks, starting from June 1st 2009.

FNX has an off take agreement with Vale Inco, which processes and markets all of the firm's ore production, and so Vale's announcement on Thursday will naturally affect FNX's production too. It is considering various options, including continuing production at current levels and stockpiling the ore for processing when Vale Inco resumes operations, temporarily suspending some or all production and starting up just before Vale lifts its suspension.

Mr Dave Constable spokesperson of FNX said that "Production is not really the key issue, any production this year is probably going to be around breakeven anyway."

FNX has already stopped nickel ore mining from its Levack and McCreedy West mines and cut more than 300 jobs, but is still mining higher-margin copper and precious metal rich areas at McCreedy, Levack and the new Podolsky mine.

But Constable emphasized that, regardless of how it responds to the Vale shutdown, the company will continue as planned with development of its high grade copper/nickel/precious metal Levack footwall deposit, which is scheduled to start production in 2010.

FNX said in February that it expected to ship 679,000 tonnes of ore from its Sudbury operations, yielding 3.7 million pounds of payable nickel, 35.2 million pounds of payable copper and 58,000 ounces of payable platinum, palladium and gold.

(Sourced from www.miningweekly.com)