Vale takes a hard look at its global portfolio, including the Voisey’s Bay expansion
IT WILL BE LATE 2017 before Vale is ready to give an update on what the future holds for the planned underground expansion of its Voisey’s Bay nickel mine.
In August the Brazil-based mining company announced it was reviewing all its assets and operations around the globe amid depressed nickel prices. That review includes the planned expansion of its Voisey’s Bay mine in Labrador. Vale formally sanctioned building an underground mine in 2015. The underground operation would include the Reid Brook and Eastern Deeps nickel deposits, adjacent to the current open pit mine. It would extend the life of Voisey’s Bay and was expected to remain in production beyond 2035. But all of that is on hold pending the review.
“The nickel price has been depressed for some time with no short-term relief in sight,” Cory McPhee, Vale vice-president, corporate affairs and communications, wrote in an email. “In response, Vale has initiated a review of its assets and operations around the globe, including the Voisey’s Bay mine expansion project. During this period we are not approving any new project contracts. Pending the outcome of that review later this year, we will be in a better position to know what the path forward for the underground project looks like.”
This is not good news for the province. It was expected approximately 800 people would be employed during the peak construction period and 850 during mining operations. However, that could all be lost if the company decides to halt the project. The province does have a development deal in place with Vale and if the project were cancelled, Vale would have to pay several penalties.
It may not come to that. McPhee says detailed engineering and procurement related to the mine expansion began last year and is ongoing. “Likewise, things are continuing as normal at our operations in Voisey’s Bay and Long Harbour,” he wrote. Long Harbour is the site of a plant that processes the nickel that comes from Voisey’s Bay. The company has yet to release how much the expansion would cost.