Voisey’s: rumor but no moves

The beginning of the summer construction season in northern Labrador is bringing speculation about a possible solution to the impasse over development of the Voisey’s Bay nickel project, southwest of Nain.

Owner Inco (N-T) recently concluded impact and benefit agreements with the two aboriginal groups affected by the development, the Labrador Inuit Association and the Innu Nation. Both groups had opposed development when Inco took over the project from Diamond Fields Resources in 1996. Details of the agreement have not been released, but Peter Penashue, president of the Innu Nation council, says the agreement includes provisions for training and employment.

The Innu vote on their agreement on June 12, and the Labrador Inuit vote on theirs June 24.

However, the Newfoundland government has still not indicated it will grant a mining lease on the Voisey’s Bay claims, sticking to its demand that Inco produce finished nickel from all Voisey’s Bay concentrates in the province. Inco, which had initially set out plans for a smelter and refinery at Argentia on the Avalon Peninsula, has held to a condition that processing of concentrates must meet the test of economic feasibility.

Reserves at Voisey’s Bay — 31 million tonnes grading 2.88% nickel, 1.69% copper and 0.14% cobalt — probably do not justify a dedicated smelter and refinery. The larger resource, 111 million tonnes grading 1.29% nickel, 0.61% copper and 0.08% cobalt, might justify a processing plant but is not known to be economic.

Current talks have centred on the possibility of building a hydrometallurgical plant at Argentia to take nickel concentrates from Voisey’s. Both Inco and the government have said that talks are under way, and Inco says the two are close to a deal. However, the company has made similar statements in the past without any final compromise being announced.

The most recent comments from Mines and Energy Minister Lloyd Matthews were that Inco’s current proposal for development “does not meet our expectations.” The differences between the company and the government apparently centre on a schedule for starting up a pilot plant and a deadline on commercial production at Argentia.

A hydrometallurgical plant for the Voisey’s ores would not be a turn-key operation but would require considerable research and development before starting up. Sulphide nickel ores, such as are found at Voisey’s Bay, are normally smelted, and hydrometallurgy has not been widely used; the exception was Sherritt Gordon, now Sherritt International (S-T), which used the process on nickel sulphide concentrates from the Lynn Lake mine in Manitoba.

Inco has well-established expertise in hydrometallurgy on lateritic nickel ores, most recently at its Goro project, now under development in New Caledonia.

Inco has applied for Canadian government money to finance research into hydrometallurgy of sulphide ores. CBC Radio in St. John’s, quoting sources in the Department of Industry, said the government may be ready to put up $100-150 million. But those sources also said an announcement would be made by May 28, though at presstime (May 29), none had been issued. The loss of a Liberal seat in the riding of Grand Falls-Gander was rumoured to have been the spark for the national government’s sudden interest in the project.

In a related development, Inco’s Indonesian subsidiary and Indonesian state mining enterprise, Aneka Tambang, announced they would form a joint venture to produce nickel from laterites at East Pomaala on the Indonesian island of Sulawesi. Aneka Tambang has been seeking feed for its ferronickel plants in southern Sulawesi.