Vale Inco Reaches Agreement With Province On Voisey’s Bay

Vale Inco has reached an agreement with the province of Newfoundland and Labrador to amend the Voisey’s Bay development agreement regarding the proposed hydromet nickel-processing plant to be built at Long Harbour.

The amended agreement enhances local employment benefits to the province and extends the completion date by 14 months to February 2013 due to the size and complexity of the plant and the length of time it takes to receive federal approval for residue disposal at Sandy Pond.

Under the new agreement, Vale Inco, a subsidiary of Vale (RIO-N), commits to a target of 77% of total project employment or 8.9 million person-hours in Newfoundland and Labrador. Under the previous agreement, the commitment was simply to full and fair opportunity and first consideration for local employment.

Specifically, the hydromet facility is expected to create 4,500 person- years of work between now and February 2013, including 460,000 hours of engineering work.

Vale Inco also commits to export no more than an average of 55,000 tonnes of nickel concentrate per year for the next four years to stay within the existing 440,000- tonne cap of exports from the province.

Vale Inco must submit a final implementation plan by March 31.

Initial work for the project such as site clearing and port demolition work will begin in April.

Under the revised agreement, Vale Inco no longer has the ability to delay the project on the grounds of labour shortages or supplier interruptions.

To measure Vale Inco’s progress, the province has insisted that the company meet six milestone dates during the first half of this year and three others during the course of construction. If these are not met, the government can halt nickel and copper concentrate exports until the milestone is achieved.

Vale Inco must also complete the second-stage feasibility process for underground mining at Voisey’s Bay by June 30, 2011.