Trapped between a rock and a hard place about sums up the fate of the Voisey’s Bay nickel-copper-cobalt project in Labrador. Hopes that the moribund project might move forward this year were dashed when owner
In its latest proposal, Inco unveiled plans to build a $750-million mine-and-mill complex in Labrador, along with a $180-million hydrometallurgical pilot plant that would have evaluated its new proprietary processing technology to process Voisey’s Bay’s ores. It also planned to spend $95 million on underground exploration.
The Newfoundland government, meanwhile, insisted that Inco provide a guarantee to build a commercial, full-scale plant, even if it were uneconomic, within a specific time frame. In 1998, the government adopted a law requiring companies to process ores and concentrates in the province if it is economically feasible to do so. At the same time, it changed the province’s Mineral Act to give the mines minister authority to refuse to grant a lease, which previously had been available to any mining claim holder, provided regulatory requirements were met.
The latest round of talks fell apart after Inco held to its position that it would build a full-scale plant — hydrometallurgical or otherwise — only if it is “technically and economically feasible to do so.”
Newfoundland Premier Brian Tobin says his government will continue to seek “full and fair benefits” for its natural resources. “At this time, the elements we require to make the deal viable for the province are just not there.”
Since early 1998, Inco has insisted that downstream processing of concentrates is not justified by the mineral reserve. While a hydrometallurgical plant would have lower front-end costs than a smelter, its suitability for Voisey’s Bay ores has not been determined. The technology works best on weakly bound metals, not on nickel and copper sulphides.
At last report, Voisey’s Bay hosted proven reserves of 31.7 million tonnes grading 2.83% nickel, 1.68% copper and 0.12% cobalt. On the exploration front, total resources in all zones have increased 10% to 136.7 million tonnes, with overall nickel grades in the Eastern Deeps zone increasing slightly to 1.4% from 1.36%.
Inco intends to continue research work on the hydrometallurgical technology to determine if it is applicable to Voisey’s Bay ores. The company already has a US$50-million, pilot plant testing similar technologies at the Goro nickel project in New Caledonia. A decision on full-scale commercial development there is expected later this year.
The Goro project hosts laterite deposits with resources of more than 200 million tonnes averaging 1.6% nickel and 0.17% cobalt, including a proven and probable reserve of 47 million tonnes.
The Goro project is expected to incur cash costs of less than US$1 per lb. of nickel. Annual production capacity is estimated at 54,000 tonnes nickel and 5,400 tonnes cobalt.
Inco’s 59%-owned Indonesian subsidiary, PT Inco, recently expanded its annual capacity to 68,000 tonnes of nickel-in-matte, making it one of the world’s lowest-cost producers, with cash costs projected at US90 per lb.
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