Natural Resources
November 12, 2008

Vale Inco to Construct a Hydromet Plant at Long Harbour

The Provincial Government confirmed today that Vale Inco has formally indicated it will construct a commercial hydromet plant at Long Harbour to process Voisey�s Bay ore.

"This is tremendous news for Long Harbour and surrounding communities and we look forward to ground being broken in 2009 and the well-paying jobs it will bring to the area over the next two decades," said the Honourable Kathy Dunderdale, Minister of Natural Resources. "Hydromet has always been government�s preferred option as it is the processing technology of the future with the greatest economic and employment impact for the province, so we feel this is the best possible outcome for the people of entire Placentia Bay region, and indeed the province."

Vale Inco informed government late Friday that it will build a hydromet plant rather than the more traditional matte refinery. This meets an important condition of the 2002 Development Agreement for the company to decide by November 15, 2008 (Friday) which processing technology it would use.

"Testing at the hydromet demonstration plant at Argentia has proven this technology will work on Voisey�s Bay ore and it meets our goal of ensuring that ore extracted in this province is processed to a finished nickel product in this province," Minister Dunderdale said. "This decision provides a major boost for the people and businesses in this area that will be felt for a very long time."

"This is a significant announcement and certainly bodes well for future development in the area," said Felix Collins, MHA for Placentia-St. Mary�s. "I look forward to the growth and revitalization of the region that this project will bring. Over the three-year construction phase, the area will see 4,890 person years of direct employment � an average of 1,630 people a year. Peak construction employment will occur in 2011 with the operational phase expected to employ an average of 450 people beginning in 2012. This is just fantastic for the area."

Hydromet processing involves using water-based chemical treatment to extract nickel from the concentrate and refining it to finished nickel. The overall economic and employment impact on the province is greater with hydromet. The more traditional matte plant would have seen nickel concentrate produced at Voisey�s Bay shipped to Ontario and Manitoba for smelting with an intermediate product sent back to Long Harbour to be refined into a finished nickel product.

The Long Harbour project passed federal and provincial environmental assessment this summer. Timelines for the project are contained in the Development Agreement. Vale Inco must deliver implementation plans for the project by December 31, 2008, and the plant must be completed by December 31, 2011. The capital cost is projected at US$2.17 billion.

The Voisey�s Bay mine started operation in late 2005. The total GDP value to the province of the hydromet plant including the mine and mill at Voisey�s Bay over the life of the project is $20.7 billion.

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Media contact:
Tracy Barron

Director of Communications
Department of Natural Resources

709-729-5282, 690-8241

2008 11 12                                                    12:05 p.m.

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