Natural Resources
February 24, 2015

Maximizing Benefits in Natural Resource Development

Agreement with Vale Secures an Additional $230 Million Investment in Province

The Provincial Government announced today that a further amendment to the Voisey�s Bay Development Agreement has resulted in an estimated additional $200 million in compensation and a $30 million commitment for community initiatives in the province. Vale is constructing the Long Harbour processing plant to process nickel concentrate from the Voisey�s Bay mine into finished nickel products.

�The basic principle of the Voisey�s Bay Development Agreement was always to maximize benefits for the people of the province. Continued investments in the processing plant and in employment generated by this project greatly exceed the commitments negotiated in the original agreement. These amendments today provide further benefits for Newfoundlanders and Labradorians - an estimated additional $200 million in compensation and a $30 million commitment to community initiatives. The processing plant will be a major asset for years to come and will support long-term economic growth and success in the province.�
- The Honourable Derrick Dalley, Minister of Natural Resources

The opportunity to make improvements to the Development Agreement arose because of the delayed construction schedule at the Long Harbour nickel processing plant. Through the amended agreement, the Provincial Government has granted Vale further permission to continue to export nickel concentrate from the Voisey�s Bay mine to ensure continuity of operations and to provide operational flexibility until the processing plant reaches full capacity. All exempted concentrate will be replaced and processed in Long Harbour in future years. In addition, the Provincial Government has been successful in negotiating further benefits estimated at $200 million in compensation for the province and a $30 million commitment by Vale for community initiatives.

�We have amended the Development Agreement in a manner that is a win-win for the province, for the communities we�re a part of, for our employees, and for Vale. Having the ability to export additional nickel concentrate allows Vale to continue generating income to support its ongoing investments in the province. It also allows our operations at Voisey�s Bay to continue unimpeded while Long Harbour ramps-up.�
- Stuart Macnaughton, Vice President of Vale�s Newfoundland and Labrador Operations

Production at Long Harbour began last year and the plant is now being ramped up � a process that will take a number of years. Vale is completing the installation of a number of impurity removal circuits which will allow Long Harbour to fully process the concentrate produced at Voisey�s Bay. By the end of next year, concentrate exports will slow significantly and the vast majority of Voisey�s Bay concentrate will be processed in Long Harbour.

An overview of amendments to the Voisey�s Bay Development Agreement, originally signed in 2002, is in the backgrounder below. The agreement is available at //www.nr.gov.nl.ca/nr/royalties/mining.html.

QUICK FACTS

• The Provincial Government announced today that a further amendment to the Voisey�s Bay Development Agreement has resulted in an estimated additional $200 million in compensation and a $30 million commitment for community initiatives in the province. The opportunity to make improvements to the development agreement arose because of the delayed construction schedule at the Long Harbour nickel processing plant.
• Through the amended agreement, the Provincial Government has granted Vale further permission to continue to export nickel concentrate from the Voisey�s Bay mine to ensure continuity of operations and to provide operational flexibility until the processing plant reaches full capacity. All exempted concentrate will be replaced and processed in Long Harbour in future years.
• Vale has invested billions of dollars in Long Harbour. Since construction started, more than 30 million person-hours of employment have been generated with 80 per cent occurring in Newfoundland and Labrador.

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Media contacts:

Diana Quinton Director of Communications Department of Natural Resources 709-729-5282, 631-8155 dianaquinton@gov.nl.ca

Bob Carter Manager Corporate Affairs Vale 709-758-8895 bob.carter@vale.com

BACKGROUNDER
Amendments to the Voisey�s Bay Development Agreement

• Under the terms of the Voisey�s Bay Development Agreement, originally signed in 2002, Vale is constructing the Long Harbour processing plant to process nickel concentrate from the Voisey�s Bay mine into finished nickel products.
• Amendments to the Development Agreement in 2009 related to the construction of the processing plant. The amended agreement included established timelines for the start of the project and enhanced local benefits. The amended agreement contained specific employment and engineering commitments during construction of the processing plant, as well as greater certainty around completion of construction.
• Further amendments to the Development Agreement in 2013 allowed Vale additional time to complete construction of the processing plant and additional exemptions for export. The amended agreement included a commitment from Vale to construct an underground mine project in Voisey�s Bay, approximately $100 million in extra revenue, and further industrial and employment benefits.
• This amendment announced today will provide further benefits estimated at $200 million in compensation and a $30 million commitment by Vale towards community initiatives.
• Through the amended agreement, the Provincial Government allows additional export of nickel-in-concentrate in order to ensure continuity of operations at the Voisey�s Bay mine and to provide Vale flexibility in planning and implementation of the remaining construction and commissioning of the processing plant. All exempted concentrate will be replaced and processed in Long Harbour in future years.
• The Provincial Government has agreed to exempt an additional 94,000 tonnes of nickel-in-concentrate from the requirements for primary processing in the province. The total potential processing exemption is 633,000 tonnes of nickel-in-concentrate including all exempted exports approved in the 2002 Development Agreement and all subsequent amendments.
• Production at Long Harbour began last year and lant is now being ramped up � a process that take a number of years. Vale is completing the installation of a number of impurity removal circuits which will allow Long Harbour to fully process the concentrate produced at Voisey�s Bay. By the end of next year, concentrate exports will slow significantly and the vast majority of Voisey�s Bay concentrate will be processed in Long Harbour.
• The amended agreement is available at //www.nr.gov.nl.ca/nr/royalties/mining.html.

2015 02 24