EDITORIAL — Stay tuned

The battle for control of the rich Voisey’s Bay nickel-copper-cobalt deposit in Labrador has become the business story of the year. Doubtless, many journalists would gladly have traded places with a fly on the wall of the boardroom where Diamond Fields Co-chairman Robert Friedland held his meetings with Inco President Michael Spoko and, later, with Falconbridge President Frank Pickard.

Voisey’s Bay has turned into a soap opera of sorts, and viewers helped to create the drama. Was Bob only using Frank to flush out Mike? What will Frank do next? And are there other players that might jump into the fray? Granted, human intrigue has its interest, but it pales in comparison to the impact Voisey’s Bay will have on the world’s nickel industry in the next century. Therein lies the real drama. Already, the deposit has become a benchmark of sorts for other nickel producers in the world; in all likelihood, some project proposals will be put on the shelf if their economics compare unfavorably with Voisey’s Bay.

Some market analysts have criticized Inco and Falconbridge for risking their financial health to acquire control of Voisey’s Bay. In particular, they note that Inco’s share price fell after announcing its multi-billion-dollar bid for Diamond Fields. Even though analysts say Inco had no choice but to make a higher offer than Falconbridge, some believe that the market was viewing Inco’s offer as too high. They argue that it is one thing to pay a good price for what is obviously there — the known deposits — and quite another to pay a premium for “blue sky” and the hope that Voisey’s Bay will become the next Sudbury.

Friedland obviously thinks differently. In fact, he says he prefers to take Inco shares, rather than cash, in order to participate in the upside as Inco becomes the dominant player in the nickel business (assuming the deal is consummated). Inco (and Falconbridge, if it decides to stay in the game by making another offer) is prepared to endure some short-term pain for long-term gain. Voisey’s Bay is clearly a story and a strategy for the next century.

It should be pointed out that Canadians, too, are winners as a result of this colossal discovery. No matter what the outcome of the corporate bidding for Diamond Fields, Canada will remain a major force in the world nickel industry. Our future nickel industry will be characterized by low-cost production and will be well-positioned for any downturn. Canada will also become an important cobalt producer.

Furthermore, Newfoundland and Labrador will have a new mine, mill and smelter, as well as millions of dollars in tax revenue, hundreds of new jobs and substantial economic spinoffs. For the first time in decades, local politicians will have something to cheer about, and not all of Newfoundland’s brightest and best will be lured to the mainland.

Native groups, too, will benefit from the job and business opportunities that will come their way. These will set the stage for native communities to begin resolving longstanding social ills that have plagued them.

There are plenty of winners in the Voisey’s Bay saga, and more will come to the forefront in the years ahead.