Voisey�s Bay Project to proceed

The Government of Newfoundland and Labrador and Inco Ltd. today signed a Statement of Principles to develop the Voisey�s Bay mineral deposit in northern Labrador and to establish a processing facility on the island at Argentia.

On hand for the announcement were Premier Roger Grimes, Mines and Energy Minister Lloyd Matthews, Labrador and Aboriginal Affairs Minister Ernest McLean, Wally Andersen, MHA - Torngat Mountains and Yvonne Jones, MHA - Cartwright-L�Anse au Clair, representing the Government of Newfoundland and Labrador; Scott Hand, chairman and CEO of Inco Ltd.;William Barbour, president of the Labrador Inuit Association; Peter Penashue, president of the Innu Nation; and Gerry Byrne, Minister of State for the Atlantic Canada Opportunities Agency and Lawrence O�Brien, MP for Labrador, representing the Government of Canada.

"Government made a commitment to the people of the province that the Voisey�s Bay nickel deposit would be developed in a manner that maximizes benefits for Newfoundland and Labrador. We had fundamental requirements that Voisey�s Bay nickel concentrate would be processed in the province to a finished nickel metal product and that any concentrate shipped out would be replaced for processing. We have achieved each of these objectives," said the premier.

"Today�s announcement confirms that this government will only sign deals that achieve maximum benefits for the people of Newfoundland and Labrador. It also demonstrates that this province continues to be an attractive place to invest and to conduct business," said the premier.

Over the currently estimated 30-year life of the Voisey�s Bay Project, total employment benefits are estimated to be 76,000 direct and indirect person years. Provincial GDP impact over the same period is estimated to be approximately $11 billion.

Inco will construct a mine and mill/concentrator at Voisey�s Bay in Labrador and a nickel processing facility at Argentia. The processing facility will be preceded by a hydrometallurgical (hydromet) research and development program that will see the construction of a demonstration plant at Argentia. Inco will also establish an Innovation Centre at the St. John�s campus of Memorial University of Newfoundland. Over the life of the project the total capital investment in the province will exceed $2.9 billion.

Once operational, the mine and mill/concentrator at Voisey�s Bay will employ 400 and increase to 800 when underground mining commences. The hydromet demonstration plant at Argentia will employ 200 and the commercial hydromet processing plant will subsequently employ 400.

Minister Matthews said that the positive impact that this project will have on the mining industry in Newfoundland and Labrador is very exciting. "The Voisey�s Bay Project will place Newfoundland and Labrador at the leading edge of research and development and new technologies for processing nickel sulphide concentrates. Commercial development of the hydromet process will position Inco as being one of the most efficient and low cost producers of nickel in the world," said Minister Matthews. "Government anticipates that this project will encourage new exploration in the province that will lead to new discoveries and developments."

"Inco�s substantial commitment to training, employment and business opportunities for Innu, Inuit and the people of Labrador in general, will initiate an exciting period of growth and development in Labrador," said Minister McLean. "This project also demonstrates that development can occur in Labrador in a manner that is environmentally responsible and acceptable to our people."

Project highlights include:

• Construction of the mine and mill/concentrator at Voisey�s Bay ($710 million, 550 jobs)
• Hydromet demonstration plant ($85 million, 200 jobs)
• Hydromet processing facilities at Argentia ($800 million, 1,000 jobs)
• Inco Innovation Centre in St. John�s ($10 million)
• Underground exploration at Voisey�s Bay ($95 million, 85 jobs)

• Mine and mill/concentrator at Voisey�s Bay (400 jobs, increasing to 800 jobs)
• Processing facility at Argentia (400 jobs)
• Inco Innovation Centre (50-60 students per year)

• Inco will develop and implement training initiatives for all phases of the project in cooperation with governments, aboriginal groups, labour organizations, suppliers and training institutions in the province.
• An Industrial and Employment Benefits Agreement will be concluded which will capture Inco�s commitments to promote employment of the province�s labour force, provide local businesses with full and fair opportunity to compete for the supply of goods and services, and will recognize the agreements in place with aboriginal groups.
• Where possible Newfoundland and Labrador facilities will be used during the construction, fabrication and assembly stages of the project. Engineering, procurement and project management will take place in the province and have significant participation by provincially-based firms.
• An Inco Innovation Centre developed in St. John�s will build on existing education and research at Memorial University of Newfoundland in exploration, mining and metallurgical technology.
• The air operation and shipping companies will have a base of operations in the province.
• Inco will supply concentrate to the Argentia processing facility following the closure of the mine in Labrador, creating jobs in the distant future.

Media contact:

Carl Cooper
Premier�s Office
(709) 729-3564

Darrell Mercer
Department of Mines and Energy
(709) 729-5777

Bert Pomeroy
Department of Labrador and Aboriginal Affairs
(709) 896-8668

2002 06 11                                8:10 a.m.