Xstrata shuts Canada nickel mine due to damage

(In U.S. dollars unless noted)

TORONTO, June 9 (Reuters) - Xstrata PLC (XTA.L: Quote, Profile, Research) has indefinitely suspended operations at its Montcalm nickel mine in Timmins, Ontario, after finding structural damage, the company said on Tuesday.

Activity at the mine was initially stopped at the end of March following unplanned ground movements at the operation, the company said.

"We've ceased operations at Montcalm for the foreseeable future because of ground conditions and safety issues," Ian Pearce, chief executive of Xstrata's nickel division, said at a metals conference in Toronto.

Xstrata acquired the operations when it bought Canadian nickel and copper miner Falconbridge in 2006.

The company will continue to investigate, and will conduct a full assessment of options for the operations, it said.

The mine had been expected to produce about 9,000 tonnes of contained nickel this year. Its mine life was scheduled to end in 2011.

Xstrata said the closure of the mine will not have an impact on the company's Sudbury Smelter in northern Ontario, which will continue to process concentrate from Xstrata's Raglan mine in Quebec, its Australasian operations, initial ore from the Nickel Rim South project in Sudbury, and third-party sources.

In February, Xstrata said it would slow production and cut 686 permanent jobs at its Sudbury operations following last year's collapse in metals prices.