Voisey's Bay headed for fast track: new owner

The new owners of the Voisey's Bay nickel and copper mine intend to speed up production, which could have significant implications for the Newfoundland and Labrador economy.

Brazil-based Companhia Vale do Rio Doce (CVRD) on Tuesday took control of Inco Ltd., which owns Voisey's Bay Nickel. The mine in northern Labrador began shipping concentrate in 2005 and is considered one of the world's premium finds of nickel and copper.

In a statement outlining its plans, CVRD said it would approach the provincial government about its "desire to accelerate the Voisey's Bay development project, as described in the Voisey's Bay Development Agreement, by a period of 12 to 18 months."

Long Harbour plant maybe built sooner

That could mean more rapid development of a processing plant in plans to build in Long Harbour, a community in Placentia Bay in southern Newfoundland.

Inco has been testing hydrometallurgical technology to see whether the water-based process is feasible for handling the type of rocks mined at Voisey's Bay.

Hydromet technology is considered to be substantially cleaner and less expensive than conventional smelters.

The hydromet test facility opened in 2005 in Argentia. Results of the test will not be known for another year and Inco had committed to make a decision on how to process the ore by the end of 2008.

Premier wants more concessions

Newfoundland and Labrador Premier Danny Williams said his government is hoping to have a good working relationship with the new owners of the mine although he warned that his government also has expectations.

"We have to take the new owners in good faith," he told reporters last week.

"We certainly hope to get more concessions from them as the new owners of that company, with regard to possibly accelerating the underground mining in Labrador, which has been a big issue for me."

Voisey's Bay Nickel currently is using an open-pit method for mining nickel at the site. It had not been planning to launch underground mining for another decade.

"I'd like to see that start sooner. I'd like to see that facility built sooner," Williams said.

CVRD says it willhonour Inco's commitments

Inco has said the processing facility, whether hydromet or otherwise, will produce about 50,000 tonnes of nickel per year. The current development plan would seethe facility begin production in 2012.

Williams has hadat timescontentious relations with Inco over the Voisey's Bay project. Most recently, he was unable to persuade the company to locate its processing plant in its original choice of Argentia, also in Placentia Bay.

Williams has said the terms of the Voisey's Bay Nickel development agreement are "weak" and that he suspects Inco may have wanted to get out of a written commitment to process nickel within Newfoundland and Labrador.

Meanwhile, CVRD said it will honour Inco's commitments to other governments, municipalities, labour unions and aboriginal groups, including Inuit organizations.