A ship bound for the Port of Quebec will leave Edward’s Cove in northern Labrador this month carrying the first load of concentrate from the Voisey’s Bay nickel mine. The maiden voyage is yet another milestone for a mine so political that, over the 13-year stretch from discovery to production, its future often seemed uncertain.
Now, with permitting and negotiations among the company, aboriginal groups and the province behind it,
“It was a typical mine startup with the usual teething problems, but overall we’re pleased with progress made,” says Phillip du Toit, managing director of Voisey’s Bay Nickel Company (VBNC), a wholly owned subsidiary of Inco.
Among the more serious incidents during the startup was a spill from a ruptured pipe that released about 1 million litres of alkaline water into a nearby river in September, killing hundreds of fish. The spill is under investigation by the RCMP and Environment Canada. VBNC suspects sabotage.
On a more positive note, Voisey’s Bay surpassed its expectations for local and aboriginal participation during the construction phase. Inco spent more than 80% of the construction capital on local companies and more than 50% of those enterprises represented aboriginal partnerships. Looking ahead, locals will make up more than 95% of the workforce at the mine during operations, and 50% of those will be aboriginal.
“Our commitment to the province was to maximize Newfoundland and Labrador participation. But I must say, looking at the statistics now, we really overachieved. I don’t think anyone expected the team to do so well as far as local content is concerned,” says du Toit.
He says the next challenge is to get the mine up to rated capacity, then try to surpass that number through “continuous improvement.” Voisey’s Bay is expected to produce 50,000 tonnes nickel, 38,600 tonnes copper and 2,270 tonnes cobalt annually over a mine life of at least 30 years.
Du Toit’s biggest concern is retaining enough skilled labour to meet these goals.
“There will be a big demand for skills and people in the mining industry over the next couple of years,” he says. “We are concerned that we might lose some of our key personnel, so skills retention and training is of paramount importance to us.”
Another key focus is ensuring Voisey’s Bay falls well within its environmental compliance requirements, a challenge given the region’s harsh climate and tendency for snow melt and precipitation to accumulate in sensitive areas. “We want to make sure that we are ready to accept all the climatic change conditions that nature can throw at us.”
Now that the mine is up and running, exploration has also become a major priority because results in that arena could offset the substantial capital investment the company has made in Voisey’s Bay to date.
The numbers are staggering. Inco bought Voisey’s Bay for $4.3 billion in 1996 and spent many millions more jumping through the hoops required to develop the deposit. Building the mine and mill alone cost $950 million and Inco has budgeted another $800 million to construct a state-of-the-art commercial hydrometallurgical facility to process the nickel-cobalt-copper concentrate.
“We have a lot of money invested both in the ground and on the ground with processing facilities. To yield dividends from that in the longer-term we have to find more nickel in the area,” says du Toit.
Regional exploration is focused on the Garland Lake area about 30 km southeast of Voisey’s Bay, where the company recently staked roughly 7,000 claims. Geophysical surveys indicate that the area is locally underlain by troctolitic rocks considered favourable for hosting Voisey’s Bay-style nickel sulphide mineralization.
Inco staked the original claim block at Garland Lake six years ago, but ceased regional exploration and let some claims lapse while it negotiated permits for the mine. Du Toit says the company will fly aerial geophysics over the newly staked area before establishing drill targets or budgeting for further exploration.
Meanwhile, exploration within the Voisey’s Bay lease will continue with a budget of $4 to $6 million per year to upgrade resources. Proven and probable reserves within the shallow Ovoid deposit currently stand at 32 million tonnes grading 2.82% nickel, 1.54% copper and 0.14% cobalt. But lower-grade resources that need to be drilled off are almost double that amount by volume.
The resources are contained within three deposits: Eastern Deeps, 1 km east of the Ovoid, and Discovery Hill and Reid Brook deposits, 1 km and 2 km west of the Ovoid, respectively. The Eastern Deeps ore — lying between 500 and 1,000 metres below surface — is expected to form the basis for underground mining operations starting in 2017-2018.
In late October, Inco also opened its demonstration plant in Argentia, Nfld. to test the hydrometallurgical processing technology the company hopes will eventually replace conventional smelting for the Voisey’s Bay nickel concentrates. The first test run will process about 10 tonnes of Voisey’s Bay ore.
The technology has already been proven in the lab and in a mini-plant at the 1:10,000 scale, but the demonstration plant will operate at a scale of 1:100 of the proposed commercial plant. Research and development has been partially financed by a $60 million grant from the federal government.
Du Toit says the purpose of the demonstration plant, which will run for about two years, is threefold. The plant will help determine if the chemistry proven in the laboratory can be replicated without a buildup of unwanted elements, ensure that the materials chosen for construction are robust enough to withstand the aggressive environment they will be subjected to in terms of heat, temperature and corrosion, and allow the consistency of the residue to be monitored and determine the most environmentally acceptable way to dispose of it.
The advantages of hydromet technology over conventional technology include energy savings of up to 40% with none of the dust or sulphide emissions associated with smelting.
In 2008, Inco will complete a feasibility study for a commercial processing facility and decide to construct either a commercial scale hydromet plant, or a conventional processing facility for Vosiey’s Bay concentrate. Both will have the capacity to produce 110 million lbs. nickel annually, worth about US$600 million at today’s nickel prices.
— The author is a freelance writer specializing in mining issues, and principal of Toronto-based GeoPen Communications (www.geopen.com)
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