(Adds Vale confirmation of closure)
SYDNEY, May 8 (Reuters) - Vale has suspended production at its Goro nickel processing plant and mine in New Caledonia due to an effluent spill, and is waiting to hear from the local government about when it can resume operations, it said on Thursday.
Vale said in a statement that it was working on limiting the damage caused by the spill, and that conditions in the local river had returned to normal Thursday morning.
The president of New Caledonia's Southern Province, Cynthia Ligeard, ordered an immediate halt to operations due to an effluent spill containing some acid, according to an earlier news report by Radio New Zealand International. Vale didn't say in its latest statement what the spill contained.
Vale, the world's second biggest nickel producer, said in November that it expected Goro to produce 40,000 tonnes of nickel in 2014. On May 1 its chief executive said that its nickel mine in New Caledonia was performing well and meeting expectations.
While analysts said the shutdown could prove short-lived, the news fed already bullish sentiment in nickel.
Nickel prices on the London Metal Exchange (LME), already up by more than a third this year due to supply constraints in Indonesia and the possibility of sanctions on Russian metal, hit the highest in more than two years on Thursday.
The government of New Caledonia was not immediately available for comment. Thursday is a public holiday in New Caledonia. (Reporting by Melanie Burton and Cecile Lefort; Editing by Richard Pullin and Michael Urquhart)