End of Impasse at Voisey’s Bay

An historic agreement was announced on June 11 between Inco Ltd. and the Province of Newfoundland and Labrador. The two parties have entered into a statement of principles on the development of the Voisey’s Bay nickel-copper-cobalt deposits in Labrador. This statement was approved in the provincial legislature on June 20 by a vote of 28 to 18.

At the same time Inco confirmed that separate Impacts and Benefits Agreements had been finalized with both the Labrador Inuit Association and the Innu Nation with respect to the project. These have since been ratified by their memberships.

The statement provides for development of a Cdn$710-million, 6,000-tonne/day mine and mill/concentrator processing plant at Voisey’s Bay, and a Cdn$180-million research and development program in hydrometallurgical processing, including a Cdn$130-million hydrometallurgy demonstration plant at Argentia, Nfld. This is the initial step toward the ultimate development of an approximately Cdn$800-million commercial processing facility capable of producing 110 million pounds of nickel per year, to be constructed and operated in Argentia. (The plant would likely use hydrometallurgy, but if that process is not successful, then the concentrate would be smelted elsewhere and the matte would be returned to Argentia for refining.)

About 400 direct operating jobs will be created at the Labrador mine/mill site, and about 400 operating jobs at the Argentia commercial processing facility. A total investment of Cdn$2.9 billion is estimated over the 30-year life of the project, including sustaining capital.

Work on infrastructure at Voisey’s Bay and Argentia began in July 2002. The two major construction projects will involve 3,700 person years of employment. The first concentrate will be produced in 2006. The commercial plant at Argentia should be in operation by 2011. Mining will switch from open pit to underground in about 2018.

Initial concentrate will be shipped to Inco’s operations in Ontario and Manitoba for processing until the commercial facility is ready at Argentia. However, “Inco will bring back for processing in the province contained nickel-and-cobalt-in-concentrate or other feeds from external sources equivalent to the quantity shipped out of the province during the interim period [2006-2011],” says the company’s press release.