After previously deciding to shut down its Voisey''s Bay nickel operations in July, Vale announced that Vale Inco will not export more than an average of 55,000 metric tons of nickel in concentrate per year during the next four years.
A new agreement between Vale Inco and the provincial government of Newfoundland and Labrador mandates that Voisey''s Bay will operate its mine at a lower rate until it finishes building a refinery in the province.
The commercial hydromet plant will not be completed until February 2013, 14 months later than originally planned.
Last week the provincial government announced that it had negotiated improvements to the development agreement with Vale Inco for the construction of the plant at Long Harbour. In a news release, the provincial government said the improvements include more certainty that the project will proceed on this new schedule, enhanced local employment benefits and greater protection of the province''s resource.
In exchange, government has agreed to a later construction completion date of February 2013 due to the increased size and complexity of the project''s construction.
Danny Williams, premier of Newfoundland and Labrador, said, In its draft implementation plan, Vale Inco requested an extension of 14 months beyond the original completion date of December 31,2011, contained in the 2002 Development Agreement. When we entered into discussions four weeks ago, it was important to us that we reach an agreement that provides greater assurances around the project, protects the public interest and give us enhanced benefits. We are confident that we have achieved that.
‘There is no change in the project beyond a new completion date of February 2013, said Kathy Dunderdale, minister of natural resources. The company will not be able to export any more than the 440,000 tonnes of nickel they were granted in the 2002 Development Agreement, despite the longer construction period. They will be required to maintain a maximum annual export average from Voisey''s Bay over the next four years.
As part of the new arrangement, Vale Inco also commits to a target of 77% of total project employment-8.9 million person hours-in Newfoundland and Labrador.