SAO PAULO/RIO DE JANEIRO (Reuters) -Brazilian power grid operator ONS told Reuters it denied miner Vale's request to increase power consumption at its northern Onca Puma nickel complex, after missing a deadline to confirm the bid.

The denial comes as Vale prepares to start up a second furnace at Onca Puma, a $555 million expansion that should help the miner boost nickel production in coming years.

Vale told Reuters that despite the denied request it was maintaining its outlook to start operating the new furnace in the second half of this year.

The miner plans to raise its global nickel production to as much as 250,000 metric tons in 2030, from around 160,000 tons last year. The second furnace in Onca Puma is expected to add annual output of 15,200 tons.

ONS documents seen by Reuters showed Vale in late 2023 asked to increase power consumption at Onca Puma to 200 megawatts at the start of this year.

Over the past year, ONS issued documents attesting to the viability of the power consumption increase at Onca Puma, but ONS said Vale did not sign a contract within the stipulated deadline.

Vale filed a new request with ONS in February, ONS said, asking for the power consumption increase at Onca Puma to start in June.

The request, however, was denied by the national grid operator, which said the additional power had been allocated to another project in its pipeline.

Vale told Reuters it is evaluating "technical alternatives" with ONS to enable the approval of its request for the Onca Puma expansion. The miner said it expects to resolve the issue soon.

The nominal nickel capacity at Vale's Onca Puma is currently around 27,000 tons per year. The complex accounted for around 10% of Vale's total nickel production last year.