Underground development will extend the life of Vale’s Voisey’s Bay project to at least 2032. (Image: Vale SA)
NEWFOUNDLAND – What Bloomberg reported last week – that Vale SA has reached a deal to sell future cobalt production from the Voisey’s Bay nickel-copper mine 35 km south of Nain – Vale confirmed today, June 11. The upfront deal is worth about US$690 million, and there will be additional payment of 20% on average cobalt prices at the time of delivery.
Vale said the advance payment will come from Wheaton Precious Metals (US$390) and Cobalt 27 Capital Corp. (US$300).
Vale will continue to hold a 25% marketing right of its future cobalt production from Voisey’s Bay.
Cash from the streaming agreement could go toward transitioning the Voisey’s Bay mine from open pit to underground. The move was approved by the company in 2015, but the project stalled.
Also today, the government of Newfoundland and Labrador announced that the underground project will proceed. The five-year construction period is to begin this summer.
Developing the underground mine will extend the life of Voisey’s Bay by at least 15 years. The total capital investment is close of $2 billion. First ore production from the underground mine is expected by April 2021.
Vale plans to develop both the Reid Brook and Eastern Deeps deposits. Declines will provide access from the surface to the orebodies. Construction includes maintenance facilities, material handling systems, a paste fill system, and ventilation. The project will also have increased power and heat generation capacity, more offices, warehouses and shops. The water and sewage treatment facilities will also be upgraded.
At peak output the new mine will produce about 40,000 tonnes of nickel in concentrate per year. The concentrates will be shipped to the company’s Long Harbour facility for further processing.
More information is available at www.Vale.com/Canada/en/.