Capital spending booming as Sudbury mines come open

Although a recent drop in the market price of nickel on the London Metal Exchange has prompted cost-cutting action by two of Canada’s nickel producers (T.N.M., Jan. 29/90) big capital expenditure programs annnounced recently have not been affected.

Coming off the crest of a wave of record profits, Inco (TSE) and Falconbridge Ltd. have earmarked millions to develop three major new nickel-copper mines on the North Rim of the Sudbury Basin. That is more than was spent in the 1980s to bring the Williams and David Bell gold mines into production at Hemlo, Ont.

The three new Sudbury mines, which will cost the two nickel- copper producers a total of $511.4 million before a single tonne of ore is brought to surface, lie within a 10-km radius of the tiny town of Levack, about 40 km north of Sudbury.

The expenditure plans make this area of Ontario the largest concentration of mine development activity in the country.

In contrast, about $366 million (equivalent to an expenditure today of about $400 million) was spent on the Williams and David Bell mines up to 1985. An additional $259 million was spent on the third Hemlo mine, the Golden Giant mine. Hemlo was the hotbed of mine development activity in the 1980s.

Inco is well advanced in its plans to hoist 2,700 tonnes of nickel-copper ore per day from the Lower Coleman deposit by January, 1992, The Northern Miner learned on a recent visit. An additional 6,400 tonnes per day will come up the same shaft by 1996.

That additional ore will come from a number of nearby deposits collectively called the East McCreedy mine.

Underground infrastructure, including ramp access, ventilation, compressed air and an ore handling system, will be shared by the Lower Coleman and the East McCreedy deposits. Ramp development is being conducted by MacIsaac Mining & Tunnelling.

Up front capital costs are expected to be $51.5 million for the Lower Coleman and $180 million for the East McCreedy.

Falconbridge, on the other hand, is spending $280 million to develop the Craig deposit, adjacent to its operating Onaping mine.

Production from the new mines will not increase total ore output by the two companies, but will sustain existing production levels as other orebodies in the Sudbury Basin are depleted.