Vale Inco changes will help workers, businesses: Dunderdale

A delayed agreement to develop a $2-billion nickel processing plant in southern Newfoundland will be worth the wait, Natural Resources Minister Kathy Dunderdale says.

Vale Inco had halted shipments of nickel concentrate from its Voisey's Bay mine in northern Labrador amid a dispute with the Newfoundland and Labrador government overdetails of the processing plant in Long Harbour, Placentia Bay.

The stalemate was resolved late Thursday with an agreement that will see the plant finish construction 14 months later than scheduled, but with what the government calls better terms for employment and local benefits.

The construction period will be longer, the plant will be larger and there are stronger measures for local work on erecting the hydrometallurgical plant.

Dunderdale said the number of jobs has not changed significantly, but those hired will get more work from the project.

"We're still talking in the range of about 1,600 jobs per year at peak construction. The length of the project, though, is going to stretch," Dunderdale said.

"The project is much more complex than they initially anticipated and so it's going to take a longer time to complete the work."

Completion in 2013

Under targets releasedThursday, construction isexpected to be completed in 2013. The changed arrangement gives Vale Inco more time to complete the work, but also gives the provincial government greater control over the pace of construction.

Among other things, thegovernment has the right to terminate the development agreement, and even its mining lease at Voisey's Bay, ifdeadlines aren't met.

As well, the new agreement ensures that Vale Inco will pay the province's industrial rate for hydroelectric power, rather than a lower, preferred rate offered to other clients.

Tito Martins, Vale Inco's CEO,said the agreement-in-principle allows the company to proceed with the processing plant.

"Our commitment to proceed with the construction of the processing plant in Long Harbour has never wavered," Martins said.

"Despite the difficult economic times we continue to remain fully committed to the project and to the province of Newfoundland and Labrador."

Ed Maher, whose Placentia business did work on the hydromet test plant that Vale Inco operated in Argentia until last year, said a longer construction period will be better for area businesses.

"Overall, I think it sounds like it's a really good agreement, both for the company and the province," he said.

"If it was compressed and the capabilities [were not] here to do it in the province, they would have to go outside the province and outside the country to get it done."