The government of Newfoundland and Labrador and Vale have agreed to amendments to Vale’s Voisey’s Bay development agreement, the centerpiece of the amendments being a commitment by Vale to develop an underground mine at Voisey’s Bay. Vale currently operates an open-pit nickel-copper-cobalt mine and concentrator at Voisey’s Bay near Labrador’s east coast about 1,200 km north-northwest of St. John’s, the provincial capital.

The underground mine will have capacity to produce approximately 40,000 mt/y of nickel in concentrate and will extend mine life at Voisey’s Bay by at least 15 years. The underground mine will extract the Reid Brook and Eastern Deeps nickel deposits adjacent to the current open-pit. Mine development will begin in 2015, and ore production will continue beyond 2030.

Newfoundland and Labrador Premier Kathy Dunderdale said, “The new mine will provide many hundreds of construction jobs after sanction in 2015 and even more operational employment than the current mine after first ore is achieved in 2019.”

The amendments to Vale’s development agreement also extended the permitted construction and start-up schedule for the company’s hydrometallurgical nickel processing plant at Long Harbour, Newfoundland and Labrador. The deadline for completion of construction had been Febreuary 28, 2013. (See related story on p. 108.)

Current plans are to start operations at the Long Harbour plant in the second half of 2013, initially processing imported nickel matte, with Voisey’s Bay concentrate being introduced gradually in 2014 once all of the impurity-removal circuits are fully operational. The plant will not be ready to handle all of Voisey’s Bay nickel concentrate production until 2015.

Capital cost for the Long Harbour plant is estimated at C$4.25 billion. Approximately 5,000 people are currently employed at the site.

Under the amended agreements, the government also will collect approximately C$100 million in additional revenue from Vale over a period of three years.

Regarding the amended agreement, Jeff McLaughlin, Vice President of Vale’s Newfoundland and Labrador Operations, said, “Underground mining is the next natural evolution in our operations at Voisey’s Bay, and this announcement allows us to unlock additional value in this world-class operation.”