Jan. 25 (Bloomberg) -- Vale SA’s Canadian unit said that it will resume production at its nickel mining and milling operations at Voisey’s Bay using non-striking labor amid a six- month strike.

The decision to resume production follows a breakdown in contract talks over the weekend between the company and the United Steelworkers Union, Rio de Janeiro-based Vale said today in a statement. The strike has paralyzed output at the mine.

About 250 of Voisey’s Bay’s 420 unionized employees are on strike at the mine, where output was halted Aug. 1 to support strikers at Vale’s Sudbury nickel and copper mine in Ontario. Vale held talks this weekend with Voisey’s Bay strikers after the company presented a new offer.

“The local USW negotiating team remains unable to bargain with authority in Newfoundland and Labrador,” said Bob Carter, spokesman for Vale Inco in Newfoundland and Labrador. The restart “enables us to provide meaningful employment for the more than 250 employees who are not on strike and it helps meet the needs of our customers who rely on us.”

To contact the reporter on this story: Diana Kinch in Rio de Janeiro at dkinch1@bloomberg.net

Last Updated: January 25, 2010 14:28 EST