Inco settles on site for Voisey’s Bay smelter

Nickel giant Inco (N-T) has announced that a former U.S. naval base in Newfoundland will be the site of a US$1-billion, smelting and refining complex to process concentrates from the massive nickel-cobalt deposit at Voisey’s Bay, Labrador.

The refinery will be in a deserted corner of Placentia, a town 130 km west of St. John’s. Placentia was the site of a U.S. naval base until it was shut down in September 1994.

The Argentia naval base was selected following a 3-month search that examined sites both on the island and in Labrador. Although Inco will pony up a single dollar for the provincially owned, 500-acre property, it will shell out US$640 million for the smelter and US$410 million for the refinery and port facilities. The mine and mill will be constructed at a cost of US$350 million.

“This was not a difficult decision to make once we received [engineering firm] Bechtel Canada’s exhaustive analysis,” explains Stewart Gendron, president of Voisey’s Bay Nickel (VBN), the subsidiary of Inco responsible for the project.

“This particular site just leaps off the page; it’s so much better than anything else. The U.S. navy basically prepared [Argentia] for us.” Although Gendron describes the site as almost perfect, the area is contaminated with oil that has leaked from drums left behind by the U.S.

navy. The U.S. government, however, has earmarked US$81 million for cleanup.

Startup is scheduled for 2000, and VBN will next register the project for environmental review in order to obtain the permits necessary for smelting and refining operations.

Inco officials say the complex, which will employ conventional pyrometallurgical techniques, will be one of the largest such operations in the world.

At the site of the proposed mine, Inco has begun its environmental impact study (EIS). The federal and provincial governments, as well as the Labrador Inuit Association and the Innu Nation, are collaborating with Inco on environmental issues pertaining to the mine.

Company officials expect to have those environmental permits in hand by May 1998, which would allow open-pit mining of the Ovoid zone to begin later that year. It is expected the first concentrates will be produced in 1999.

The entire operation is expected to produce 3,500 jobs in Newfoundland and Labrador, a region that has seen its unemployment rate escalate in recent years. Inco has yet to negotiate a tax regime for the project with the Newfoundland government.

Michael Sopko, Inco’s chairman, says startup had to be pushed back as a result of legal problems faced by Diamond Fields Resources, the company that owned the deposit.

Plans call for a plant to be constructed north of the Ovoid zone, with roads leading to an airstrip, a tailings basin, a mineralized waste rock dump and a shipping dock on Anaktalak Bay, 100 km from the open waters of the Labrador Sea.

Voisey’s Bay itself is considered a pristine area, and will not be affected by the operations of the mine or mill.

Activity in the Voisey’s Bay region will pick up early next year with the construction of an operations office in Happy Valley-Goose Bay to support ongoing exploration activities and co-ordinate construction of the mine and mill.

The mine, explains Sopko, will produce a nickel-cobalt concentrate with some copper in it, and a copper concentrate with some nickel in it. The nickel concentrate will be processed at Voisey’s Bay, whereas the copper concentrate will be sold.

“The volume is not sufficiently large to permit the installation of the appropriate infrastructure to process that copper,” says Sopko.

The deposit at Voisey’s Bay is estimated at 150 million tonnes, including a preliminary figure of 50 million tonnes grading 1.36% nickel, 0.67% copper and 0.09% cobalt in the Eastern Deeps zone. The reserve at the Ovoid zone, where the mine will be situated, is 31.7 million tonnes grading 2.83% nickel, 1.68% copper and 0.12% cobalt.

Meanwhile, exploration of Inco’s other claims in the Voisey’s Bay area continues. Robert Horn, the company’s vice-president of exploration, says surface nickel mineralization has been found coincident with geophysical anomalies at the Ashley and Sarah projects, 8 km southwest and 6 km northeast of the Ovoid zone, respectively.

Inco has budgeted US$28.6 million for exploration of Voisey’s Bay next year, up from US$16.5 million in 1996.