TORONTO (miningweekly.com) - The Falconbridge Dominicana (Falcondo) nickel mine and plant will not resume operations, and will be placed on care-and-maintenance, Xstrata Resources said on Thursday.

Falcondo, in the Dominican Republic, has a capacity of 29 000 t/y of nickel in ferronickel.

Xstrata suspended the operation in August this year, citing high input costs and low metal prices, and said at the time that the shutdown would last four months.

"Despite evaluating various alternatives for the Falcondo operation during the temporary suspension of operations, it is not economically viable to restart operations," Xstrata Nickel CEO Ian Pearce said on Thursday.

About 30% of the operation's full-time equivalent employees will be retained to provide care and maintenance, operate the power plant that provides energy to the Dominican Republic grid, and conduct progressive mine rehabilitation and reforestation activities.

The remaining 900 employees will be retrenched and will receive severance packages in addition to outplacement services and training, Xstrata said

The company is also conducting a feasibility study into the potential to convert the operation's energy source from oil to a "viable alternative".

Prices for nickel, which is used to make stainless steel, have fallen sharply off 2007 levels, as slowing global economic activity dampens demand for the metal.

Also on Thursday, Vale Inco announced that it would shut its Copper Cliff South mine, in Sudbury, Ontario, in January.

For an up-to-date list of companies that have announced cutbacks as a result of the financial crisis and commodity-price declines click here.