Globe & Mail story - signs of hope for Voisey's project??
Tobin talks with potential partners for
Voisey's Bay
by Janet McFarland and Allan Robinson - Friday, June 4, 1999
Newfoundland Premier Brian Tobin has talked to potential partners
willing to help Inco Ltd. develop its giant Voisey's Bay project, but
the company said yesterday there is no point in a partnership right
now.
Mr. Tobin said Tuesday that the province has had talks with at least
two major North American mining companies interested in taking a
share in the project and helping to develop a smelter and refinery.
"[There are] two other major players who have expressed an interest
in taking a share, making an investment in refining capacity,
processing capacity," he told reporters during a news conference in St.
John's. "That could be part of the solution here."
Mr. Tobin added that Toronto-based Inco has not been interested so
far in bringing partners into the deal because it wants to maintain its
dominant position in the world nickel market. "But I think the solution
here may well be Inco being prepared to sit down and bring partners
aboard to make this project happen."
Inco and the Newfoundland government have been at a stalemate over
the development of Voisey's Bay, which contains the world's largest
nickel deposit. Inco purchased the property for $4.3-billion in 1996
but has seen the price of nickel fall sharply since then.
Last year, Inco said it was no longer economically feasible for it to
build a smelter in Newfoundland to process ore from the deposit, but
the province has insisted the company must refine the ore there to
receive provincial approvals. Inco, which lost $76-million last year,
has said a smelter and refinery could cost up to $1.6-billion.
Inco spokesman Jerry Rogers said yesterday that the company has
repeatedly said it would consider a partner for the Voisey's Bay
development, similar to partners it has in mines in Indonesia and New
Caledonia. But he said there is no point in having discussions to find
a partner until the company has approval to go ahead with the project.
"What's the point of looking for a partner at this point when we don't
even have a deal?" he said. "It's way too premature. We're not looking
for a partner now."
Mr. Rogers also said Mr. Tobin has talked about partners for
Voisey's Bay in past years, and suggested his comments may be old
news.
But a spokeswoman for Mr. Tobin said discussions with at least one
company have occurred recently. "I certainly know in reference to one
interest that there has been recent contact," Heidi Bonnell said.
Mr. Tobin said the fact that "significant, major players" have quietly
approached the government to express interest in the project supports
his government's analysis that the project is feasible with a smelter in
Newfoundland.
"It's not for me to tell the company they should take partners on. But I
do know because we had been approached . . . that there is interest in
participating, if that can be worked out with Inco, in a processing
facility in Newfoundland and Labrador."
Mr. Tobin also insisted that his government has not changed its earlier
position that it wants all the Voisey's Bay ore to be refined in the
province. He said Inco has indicated it wants to bring a new proposal
forward, and said he would listen to what the company has to say.
However, he said he would not discuss "hypothetical" scenarios about
whether he would approve a project in which a portion of the ore was
refined elsewhere. And he said the company has mentioned to the
province that one option it is considering is hydrometallurgical
technology, which could change the proposal.
"Until you see the proposal, assuming one is coming, you'd be foolish
to turn it down," Mr. Tobin said.
Hydrometallurgical technology extracts nickel or other metals from
rock using chemicals, avoiding the need for a smelter. The technology
has not been used before on sulphide rock of the type found at
Voisey's Bay or in Sudbury, where Inco also owns nickel mines.
But one mining industry source said companies such as Inco are
studying the possibility of using hydrometallurgical processes to
extract ore from sulphide rock. The basic idea is that the nickel
concentrate obtained by the milling process can be ground into a fine
powder and treated by a high-temperature autoclave process to remove
the sulphur. At this stage, almost pure nickel could be extracted
through a hydrometallurgical process, which uses chemicals and
electricity.
"The method hasn't been used yet in a large tonnage [nickel]
operation," the source said.
Such a processing facility, if it works, could be located in
Newfoundland to handle nickel shipped from around the world. The
capital costs would be significantly lower than those for a smelter and
refinery.
Mr. Tobin said declining nickel prices and decreasing financial
strength at Inco have changed the climate from two years ago.
"I don't think it's helpful for the province to simply say we made a
deal two of three years ago when the price of nickel was much higher
than it is now, and everything that was agreed then . . . must be exactly
the same."
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