January 13, 2011 / 7:55 AM / 9 years ago

UPDATE 2-Nickel-rich New Caledonia braces for cyclone

* Cyclone expected to hit New Caledonia early Saturday

* SLN smelter in Noumea seen unaffected

* Xstrata taking measures at Koniambo project

(Adds Xstrata comments on its Koniambo project))

SYDNEY, Jan 13 (Reuters) - New Caledonia, home to the world’s largest nickel deposits, was on alert on Thursday as tropical cyclone Vania was expected to hit the eastern part of the island sometime early on Saturday with wind gusts of up to 170 km per hour.

The island’s warning status was upgraded to amber from pre-alert on Thursday as the category 2 storm approached.

Vania was picking up strength and was expected to hit New Caledonia at its eastern tip, just east of the capital Noumea, the U.S. Navy’s Joint Typhoon Warning Center said.

“Tropical cyclone Vania is forecast to steadily intensify as it continues to track toward the very eastern tip of New Caledonia in a favourable upper level environment,” the JTWC said in an advisory.

The South Pacific nation is estimated to hold up to a quarter of the world’s nickel reserves.

Societe le Nickel (SLN), owned by France’s Eramet (ERMT.PA), was still running normal operations, and expected to keep operating its Doniambo smelter in Noumea, a city of 100,000, a spokeswoman said.

SLN, which was expected to produce about 55,000 tonnes of nickel last year, said it would take precautionary measures.

Anglo-Swiss mining group Xstrata XTA.L said it was also taking measures to protect employees and secure the construction site of its $3.85 billion Koniambo nickel project.

Koniambo, 49 percent owned by London-listed Xstrata, is due to start processing ore next year and eventually ramp up to produce 60,000 tonnes a year.

The project is located at Vavouto on the west side of the island, opposite the direction from which the storm is expected to come, an Xstrata spokeswoman said in London. The site has been designed to withstand cyclones, she added. (Reporting by Cecile Lefort and Balazs Koranyi in Sydney and Eric Onstad in London; editing by Michael Smith and Sue Thomas)

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