Talks have resumed between Inco (N-T) and the government of Newfoundland to get the long-stalled Voisey’s Bay nickel project in Labrador back on track.
The provincial government has announced that the two sides would resume formal negotiations for development of the $4.3-billion project.
Inco put the project on hold in 1998, when the government refused to grant a lease unless Inco guaranteed that it would build a $1-billion smelter-refinery complex in the province.
The company and the government had informal talks in March — the first since negotiations broke down in January 2000. Both sides now feel that they have established enough common ground to resume negotiations.
“The government will be entering into these talks with the view to reaching a deal that achieves maximum benefits for Newfoundlanders and Labradorians,” says Mines and Energy Minister Lloyd Matthews.
The project was given another glimmer of hope last week, when Scott Hand, Inco’s CEO, told a mining conference in Montreal that his company was open to developing the project with a partner.
Many analysts see Inco as a likely target for a takeover bid by London-based Rio Tinto (RTP-N), which recently announced its plans for expansion in Canada, including the possibility of further acquisitions.
Last November, hopes for a revival of the project were raised when Roger Grimes replaced Brian Tobin as Newfoundland’s premier. Grimes is seen to be more eager to strike a deal with the nickel giant.
A media blackout will be in effect during the negotiations.
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