Voisey’s Bay heading underground - Deal includes $100 million from Vale over next three years

Ashley
Ashley Fitzpatrick
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(Left to right) Jeff McLaughlin, VP of Vale's Newfoundland and Labrador operations, Premier Kathy Dunderdale and Natural Resources Minister Tom Marshall

Vale is taking its mining operation in Voisey’s Bay underground.

Construction work for the underground mine is slated to start in 2015, with first ore expected by 2019.

The commitment to the mine extension came as part of a new deal struck between Vale Newfoundland and Labrador and the provincial government.

The deal assures the current mining at Voisey’s Bay can continue uninterrupted while the company’s new, $4.25-billion processing facility at Long Harbour is completed.

It means mining operations at Voisey’s Bay can continue until at least 2035.

“It’s an important mine and extending it is important for us and the industry, generally. It’s a fabulous win-win,” said Gerry O’Connell of Mining Industry NL, who spoke

with The Telegram immediately following the announcement of the deal.

 “(And) with these kinds of mines, you never know. I meant they could go on for — Sudbury’s been going for 100 years,” he said.

The move underground will produce 800 jobs during construction. That will be on top of the 475 jobs associated with the ongoing, surface mining operation.

The new deal

According to Vale’s vice-president

of provincial operations, Jeff McLaughlin, the underground mine will offer about 400 mining jobs once up and running.

He was with Premier Kathy Dunderdale and Natural Resources Minister Tom Marshall for the announcement of the new agreement between the company and the province at Confederation Building in St. John’s Thursday.

The new deal is actually an update to the Voisey’s Bay Development Agreement.

An earlier update to the same, in 2009, stated Vale was to complete construction of its new hydrometallurgical processing facility at Long Harbour by Feb. 28, 2013. It included a limit on how much Voisey’s Bay ore could be sent outside the province for processing in the interim.

The new deal pushes back that timeline, giving Vale until 2015 to get the plant at Long Harbour up and running on Voisey’s Bay nickel concentrate.

Until then, the company is being given a limited exemption to the earlier cap on exports, to the tune of 84,000 tonnes of nickel concentrate from 2013-2015, with options for a further 15,000 tonnes under specific conditions.

$100-M payment from Vale

All exported concentrate must be replaced by equal imports to Long Harbour in future years.

As well, the province will receive a $100 million payment from Vale over the next three years.

Vale will not be permitted to send anything from Voisey’s Bay out of province from 2015-2019, providing plenty of feed to get things moving at the Long Harbour plant.

The premier told reporters the company faces serious penalties if they do not process concentrate in the province to the levels agreed, though she is not able to say publicly exactly what those penalties are.

“If timelines aren’t met, then damages will accrue to the province and they are substantial enough benefits that I think the company will be well disciplined in terms of meeting the benchmarks that are set down,” she said.

As for environmental assessment, the original work completed for the Voisey's Bay mine included the possibility of the mine extending underground and no further assessment is planned.

McLaughlin said no decision has been made on how the mine extension will be powered.

Options of diesel, wind and small hydro projects are all being considered.

Opposition applauds extension

The announcement was made to a meeting room filled with mainly Tory members, receiving a response of applause, chair thumping and calls of: “Here! Here!”

That said, the celebration was not all on the Tory side.  

Minutes after the announcement, Liberal leader Dwight Ball said the deal “builds on what I always believed was a good deal in the beginning,” referencing the original Voisey’s Bay agreement from 2002.

“Certainly we’ve gained a lot of experience over the years and I think right now this is a good day for Newfoundland and Labrador,” he said.

He said he wants to know more about where the $100 million figure came from, whether or not it is a fair compensation for pushing back the timelines. He is also looking at the protections in place against further delays.

 “These details were vague today. We’d like to get some more specific answers around that,” he said.

NDP leader Lorraine Michael said she is “very glad” the underground extension at Voisey’s Bay is moving ahead.

She said she has questions about the $100 million payment to the province.

“I’m not sure what the reasons for the slowdown on the facility are and that’s something that I (also) want to pursue, and find out why they are basically two years behind getting that finished,” she said.

McLaughlin says Vale staff are focusing on getting into detailed engineering and design. He said some limited exploration and gathering of geotechnical information will be required as part of that process.

“I think that’ll be the focus of the next several years. But we’ve got a good, long-life mine there,” he said.

afitzpatrick@thetelegram.com

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Recent comments

  • owen
    April 06, 2013 - 00:16

    Ralph never cared about his province he sold it out, sending raw bitumen to the states. He also changed every labour law in the book so chinese workers and bayman newfies could go to alberta ans work for free! All the high grade ore is gone Kathy! Well done Mr.Grimes!

  • randy
    April 01, 2013 - 09:05

    The three billion being spent in Long Harour is a drop in the ocean that VALE could care less about. All of the ore from Voisey's Bay will be refined outside of the province and there will never be enough nickel refined in Newfoundland to chrome a car bumper, further there will never be an ounce of ore come back to Long Harbour. The hydromet process has never worked anywhere else in the world, why would it work here. We have been hood winked again, SUPRISE! SUPRISE!

    • Foghorn Leghorn
      April 02, 2013 - 10:11

      You may not be too far off of the mark. At Vale's current levels of production they are producing approx. 1 Billion dollars worth of ore per year. No doubt that will increase as the size of the mining operation expands. The 3 Billion for Long Harbour will pale in comparison to what they actually take out of the ground.

  • Wanted for upcoming election two years hence, Politicians with Ralph Klein's integrity and fierce love for his province. He was a politician who would never allow his province's raw resources to be given away for others to prosper.
    March 30, 2013 - 20:58

    Wanted for 2015 election Politicians with Ralph Klein's integrity and fierce love for his province. Even though Ralph Klein was a blunt he was a popular man who fiercely defended the interests of his home province of Alberta. He was a politician who would never allow his province's raw resources to be given away for others to prosper. When are we going to be graced with politicians who hold such attributes as Klein?

  • Easter Bunny
    March 30, 2013 - 15:26

    FOGHORN LEGHORN, surely your not suggesting that "A" former Liberal Government would sell us out?? and surely your not suggesting that a present government is doing the same? and Heaven forbid that some multi national company would take advantage of us?? I mean this has never happened in our past. our "Leaders" have always been forthright and honest with us poor voters, they would never cause us any hardship or hide things from us. FOGHORN LEGHORN how could you even suggest such a thing?? I remember a former Premier saying that not a spoonful of ore would leave the province. the ship running from Voisey's bay Labrador to Quebec is always empty, it's not removing any ore, it's just bringing in supplies. may as well write a song about it people. at least we can get some comfort listening to the music, after all we're paying for the fiddler.

  • Foghorn Leghorn
    March 30, 2013 - 09:22

    I have heard that workers at the Voiseys Bay mine actually have an unofficial pool betting if any ore from the mine will ever be processed in Long Harbour. The ore is rumoured to unacceptable for the hydromet processing being built in Long Harbour. The only reason Long Harbour was built was to satisfy the MOU signed with the Provincial Government at the time. Only time will tell, the proof is in the pudding as the saying goes!