Majors pour billions into Eastern Canada

It’s not quite as exciting as a new mine built from scratch on a substantial mineral discovery but, in dollar terms, the recent expansions announced by majors active in eastern Canada all add up significant economic activity.

Construction is now underway at Vale‘s (VALE-N) $200-million “CORe” (Challenging Ore Recovery) project at its Clarabelle nickel mill in Sudbury, Ont., which should increase mill recoveries by 4%. Vale is building a 3,500-sq.-metre plant containing a new, state-of-the-art flotation system, and is improving existing assets including the installation of a new Isa mill and replacement of flotation cells. CORe will create 150-200 jobs during peak periods, with construction slated to be complete in July 2013.

CORe is part of Vale’s $3.4-billion, 5-year modernization plan for its Sudbury nickel operations, and its overall $10-billion, 5-year investment plan for Canada announced last November. Vale’s Canadian nickel assets are the Sudbury mining-milling and smelting-refining complex, a similar but smaller-scale mining-smelting complex in Thompson, Man., and the open-pit Voisey’s Bay nickel-copper mine in Labrador.

One of Vale’s bigger efforts in Sudbury is the US$362-million reopening of its Totten mine, which was closed in 1972. Totten has a production target of 8,200 tonnes nickel per year plus byproduct copper, platinum, gold and silver, with the project scheduled for completion soon.

Vale is also building a US$2.8-billion, 50,000-tonne-per-year plant at Long Harbour, Nfld., to process Voisey’s Bay concentrate. The company has just awarded a two-year, $600-million contract to KBAC Constructors, a Kiewit-BMA-G.J. Cahill Partnership to provide mechanical, piping, electrical and instrumentation services for construction of the plant, which will make use of newly developed, cleaner hydrometallurgical processes rather than traditional, dirtier smelting.

Vale says the Long Harbour plant will generate 10 million person-years of employment during construction, which is scheduled to be completed in February 2013. Once in operation, the plant will have a permanent workforce of 475.

In Quebec, Rio Tinto (RIO-N, RIO-L) subsidiary Rio Tinto, Fer et Titane (or RTFT, previously known as QIT-Fer et Titane) will spend $800 million over the next five years extending the life of its Lac Tio ilmenite mine in Havre-Saint-Pierre on Quebec’s North Shore, and modernizing its Sorel-Tracy metallurgical complex, north of Montreal.

RTFT will expand mining operations from five to seven days a week, which should create 70 new jobs in Havre-Saint-Pierre, and extend the life of the mine until 2050. In Sorel-Tracy, RTFT will upgrade equipment and systems to improve efficiency and environmental performance, including a 60% reduction in sulphur dioxide emissions.

RTFT says its plans are aligned with the Quebec government’s newly unveiled Plan Nord, which lays out a coordinated approach – backed by $2.1 billion in funding over the next five years – to develop the province’s remote resources.

Last week, ArcelorMittal (MT-N) used the positive Plan Nord buzz to announce it would spend US$2.1 billion to almost double the size of its Mont-Wright iron ore mining complex in Fermont, Que., and beef up its associated rail and port facilities that connect the mine to the sea. The effort will create 8,000 jobs at its peak.

Not to be left out, Xstrata (XTA-L) is currently building its fourth underground nickel mine, named Kikialik, at its Raglan nickel mining and milling complex in northernmost Quebec’s Ungava region, with commercial production slated for 2012. Xstrata is spending more than $200 million on capital investments at Raglan this year for mining development, infrastructure maintenance and geological study.

In Sudbury, Xstrata and Vale are taking the unusual step of teaming up to extend the life of Xstrata’s Fraser nickel mine. Xstrata will use its existing shaft infrastructure at Fraser in Levack to mine mostly copper ore from Vale-owned orebodies that are currently only directly accessible using Fraser infrastructure. The project has a 10-year life and will result in the permanent recall of 75 production and maintenance workers to Xstrata.

Additionally, production at Vale’s Coleman mine will now be enhanced through the supply of increased fresh-air ventilation from Xstrata. Xstrata says this will improve working conditions, and enhance production and employment opportunities at Coleman’s 170 Ore Body mining project, set to begin production in 2012.