Talks between
“Overall, the negotiations have been going very well,” Mines and Energy Minister Lloyd Matthews told an audience of businessmen in St. John’s. “We have been able to resolve many points at issue. . . . This government is prepared to negotiate a deal. However, we will take as long as is necessary, and so in terms of a timeframe, that could mean weeks, months or even longer. While we are all interested in getting it done as soon as possible, what really matters is that we do the right deal for the people of the province.”
Scott Hand, Inco’s deputy chairman and chief executive officer, believes the extension will allow the parties to address further concerns. “By taking extra time, we can work to try to resolve the remaining questions between us and to come up with a project development framework that allows us to proceed with Voisey’s Bay in a prudent and measured way,” he said in a prepared statement.
Negotiating teams from Inco and the government have been meeting on a weekly basis since talks resumed in June, and Hand and Matthews have been meeting regularly to discuss specific issues raised at the bargaining table.
Discovered in 1994, the Voisey’s Bay project has remained dormant while Inco and the government bicker over where the nickel concentrate should be treated. The government continues to insist that all development proposals include a refinery plant to process the concentrate in province.
“Our negotiating teams continue to move forward with a view to finding common ground on all issues,” said Matthews.
The deposits that constitute Voisey’s Bay contain a total resource of 141 million tonnes, including a proven 31 million tonnes grading 2.88% nickel, 1.69% copper and 0.14% cobalt in the Ovoid zone that can be mined by open-pit methods. Most of the remaining 110 million-tonne resource is contained at depth in the Eastern Deeps zone and the Western Extension, which includes the Reid Brook and Discovery Hill zones, as well as other small zones. The indicated portion of this resource is estimated at 95 million tonnes grading 1.28% nickel and 0.6% copper. A further 14 million tonnes grading 0.98% nickel and 0.66% copper are categorized as inferred.
Integrated plant
Matthews says discussions have centred on an integrated mine-and-mill processing plant on site plus roads, accommodations and port facilities at an estimated cost of $600 million. Previously, Inco had proposed developing Voisey’s Bay in two phases: first as an open pit at a daily milling rate of 6,000 tonnes, and later as an expanded underground mine. The open pit would be 1 km long, 500 metres wide and 125 metres deep. More information is needed before the mining plan for the underground portion can be completed, though development of the mine and expansion of the concentrator are expected to add $750 million to the total cost.
Underground exploration had been planned for 1997 in the Eastern Deeps and Reid Brook zones to define grades and obtain a bulk sample for metallurgical work. However, a September 1997 ruling by the Newfoundland Court of Appeal sided with certain aboriginal groups and, as a result, Inco was prohibited from starting construction of a temporary road and airstrip to support the underground program until after an environmental assessment of the mine and mill facilities had been completed and approved.
On the processing side, a proposed $200-million program of research and development would include a hydrometallurgical test plant in Argentia, on the southeastern corner of Newfoundland. The plant would evaluate the suitability of processing Voisey’s Bay concentrate. This would be followed by construction of a $750-million commercial-scale hydrometallurgical plant to process concentrate to a finished nickel product.
Meanwhile, at its Sheridan Park research plant, Inco has been studying a proprietary hydrometallurgical process for treating the Voisey’s Bay sulphide concentrate.
‘New standard’
Said Matthews: “This project will set a new standard because, for the first time, we will see ore mined, milled, concentrated and processed into a finished product in this province.”
The project is on a peninsula bordered to the north by Anaktalak Bay and to the south by Voisey’s Bay, 35 km southwest of Nain and 80 km northwest of Utshimassits. Inco owns a 100% interest in 3,419 mineral claims covering four separate claim blocks in Labrador with a total area of 855 sq. km.
Inco first acquired a 30% direct and indirect interest in the Voisey’s Bay discovery by making an initial $516-million investment in 1995. The nickel miner increased its ownership to 100% in 1996 by acquiring, in a deal worth $3.1 billion, all of the shares of Robert Friedland’s Diamond Fields Resources not already owned by the company.
Before closing down its exploration camp at Voisey’s Bay in September, Inco had spent $100 million on exploration, bringing total expenditures by Inco and Diamond Fields to about $160 million. A total of 555 holes, representing 350,000 metres, have been completed.
At the end of 1977, Inco submitted a 2,000-page environmental impact statement (EIS) to regulatory authorities for the development of a proposed 20,000-tonne-per-day mine-and-mill complex plus related infrastructure. Following the initial public review, Inco was asked to provide additional information, which it completed and submitted in June 1998. In Apri1 l999, the environmental assessment panel recommended that the project be allowed to proceed, subject to more than 100 recommendations. One of the recommendations was that production levels should ensure a mine life of at least 20-25 years. Others call for the completion of land claim negotiations by the federal and provincial governments with aboriginal communities, and the completion of impact and benefits agreements with both the Innu Nation and the Labrador Inuit Association.
Matthews said the respective parties have made substantial progress on these agreements. “Good work has been done on the agreements that require aboriginal participation on both the land claims and the impact and benefits agreements.”
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