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HomewardboundAt long last, Voisey’s Bay nickel is being refi ned in the province where it came fromBy Darren Campbell

In late May, the 188-metre-long MV Umiak 1 vessel motored into the port of Long Harbour, Newfoundland and Labrador bearing precious cargo. That cargo was relatively small – 2,000 tonnes of nickel concentrate. But this load was the fi rst major delivery of nickel concentrate produced at Vale’s Voisey’s Bay mine in Labrador to its processing plant located in the tiny town of Long Harbour.

“It’s the fi rst step in the road to having all the production from Labrador heading to Long Harbour for processing in the province,” says Vale spokesperson Bob Carter.

The shipment from Voisey’s Bay to the Long Harbour plant has been a long time coming. Production at the massive open pit mine, which averages 50,000 tonnes of nickel in concentrate per year, started in August of 2005. However, until the MV Umiak landed at the port with its Voisey’s Bay concentrate, only small amounts of the production had been processed in the province where it was mined. Instead it had been sent to Sudbury, Ontario and Thompson, Manitoba.

But that’s about to change, and the Long Harbour processing plant has emerged as an example of what “value added” jobs can look like in a region that will take all the employment it can get.

A bird’s eye view of Vale’s Long Harbour nickel processing plant Photo courtesy Vale

Economy

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That the plant exists is no small thing. Back in 1999, former premier Brian Tobin demanded that all the ore from Voisey’s Bay must be milled and refi ned in Newfoundland and Labrador. But demands are one thing, delivering on them is quite another. It wasn’t until 2002 that a development agreement was signed between Vale and the provincial government in which the Brazilian-based mining company promised to build a processing plant in Newfoundland and Labrador.

The announcement came after Vale developed a new process to refi ne Voisey’s Bay concentrate instead of using traditional smelting and refi ning. Before the plant was built, Vale embarked on a $200 million research and development program to explore the option of using hydrometallurgical (hydromet) technology at the plant. The research and development program ran from 2002-2008.

Hydromet is a metal processing technology that uses a chemical procedure combining water, oxygen and other substances in a vessel to dissolve a metal from its ore, concentrate or some other product. Vale’s webite says the nickel industry has traditionally smelted concentrates from nickel and then refi ned it further to produce

nickel without impurities. The hydromet process Vale developed is more effi cient because it develops the concentrate directly to metal products without having to smelt it fi rst. In short, hydromet technology is more effi cient because it reduces metal production of concentrate from two steps to one.

The project has not been without its hiccups. In 2009 the provincial government negotiated what it called “improvements” to the 2002 development agreement after Vale was unable to complete the plant by 2011 as laid out in the original terms. As a result, Vale agreed to a target of 77 per cent of total project employment coming from Newfoundland and Labrador. Under the 2002 agreement, Vale had only committed to provide provincial residents full and fair opportunity and fi rst consideration for employment on the project. Vale also committed to completing the project by February 2013.

“It was important to us that we reach an agreement that provides greater assurances around the project, protects the public interest and gives us enhanced benefi ts. We are confi dent we have achieved that,” said Danny Williams, the premier at the time the 2009 amendments were announced.

However, the hydromet plant didn’t start producing nickel concentrate until July of 2014. Up until the MV Umiak delivered the 2,000 tonnes of Voisey’s Bay nickel concentrate, Long Harbour had

“ It’s the fi rst step in the road to having all the production from Labrador heading to Long Harbour for processing in the province.”

Vale spokesperson Bob Carter

been processing a concentrate with a 78 per cent nickel content known as “nickel matte” from Indonesia. Essentially, the Indonesian nickel matte the plant has been using for a year was a chance to test its systems and ensure the plant was ready to process Voisey’s Bay concentrate, which Carter says typically contain about 20 per cent nickel.

By the time the Voisey’s Bay product is run through the hydromet process, Carter says it will produce a product that is 99.9 per cent nickel. But the plant isn’t ready to go off the Indonesian nickel matte cold turkey. “By the fi rst quarter of 2016 we’ll be in a position where the impurity systems are in place and we should have suffi cient concentrate to switch to full Voisey’s Bay concentrate,” Carter says. The plant has the capacity to process 50,000 tonnes of concentrate annually. However, Carter says it will take a “number of years” before Long Harbour is pumping out that much product.

No matter, the plant has already provided an economic lift to Long Harbour, a community of 300 people located 100 kilometres west of St. John’s, and the province in general. Vale’s facility cost US$4.25 billion and it had a peak construction workforce of

700The number of

people currently supporting

operations at the Long Harbour

nickel processing plant

The MV Umiak enters Long Harbour in May of 2015 bearing Voisey’s Bay nickel concentrate Photo courtesy Vale

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US4.25Billion Dollars

The cost to build Vale’s Long Harbour nickel

processing plant

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6,000 in 2013. In 2015, construction employment at the plant is expected to be approximately 1,500 jobs.

This is the type of value-added project jurisdictions across Canada look for when companies seek to extract their natural resources. Vale’s mine in Voisey’s Bay employs about 450 people directly (and hundreds more indirectly), but if its concentrate was refi ned somewhere else, another town, province or country would be reaping the full benefi ts of Voisey’s Bay’s nickel motherlode. The thousands of construction jobs that have been created by the Long Harbour project, along with the 700 people currently supporting operations at the hydromet plant, would occur somewhere else.

What’s more, big industrial projects create spinoff opport-unities. They require goods and services to stay in operation, which local businesses and entrepreneurs are well positioned to provide. Take the Long Harbour Development Corporation. The economic arm of the town started building an industrial park on 7.5 acres of land in 2014. The rationale behind the park is that it will provide semi-serviced lots for businesses looking to supply the nickel processing plant. The project cost $2.2 million (the provincial government and the Atlantic Canada Opportunities Agency kicked in a combined $1.6 million) and involved the construction of roads, bridges, fencing, water and sewer pipes, electrical connections and landscaping. “Our business model is based on the fact that a lot of the goods and services required to operate the plant would be best served, from an operator’s perspective, if they were in close proximity to the plant,” Joe Bennett, the Corporation’s executive director, told the Daily Commercial News in 2014. |nrm