The Positive Economic Impact of the Vale Inco’s Voisey’s Bay Nickel Project on Aboriginal Communities and Newfoundland – Raymond Goldie

Raymond Goldie is a senior mining analyst with Salman Partners Incorporated and is the author of “Inco Comes to Labrador” (Flanker Press, 2005). This article was written in December, 2008.

Since the late twentieth century, there have been remarkable changes in the world’s mining industry’s attitudes with respect to community relations.  The mining industry has come to recognize that it is of critical importance to engage the local community in mining development, and it has acted accordingly.  The development of the Voisey’s Bay mine in northern Labrador by Inco Ltd. and its successor, Vale Inco, has epitomized these changes in attitudes and actions.

In 2002, Voisey’s Bay Nickel Company (“VBNC”, now Vale Inco Newfoundland and Labrador ), then a subsidiary of Inco (and now of Vale Inco), made deals with the government of Newfoundland and Labrador and with First Nations groups in the vicinity of the Voisey’s Bay mineral deposit.  These deals allowed Vale Inco to develop a mine and concentrator at Voisey’s Bay.  This operation produces concentrates (which are feedstock for smelters and refineries) of nickel and copper.  The deals also obliged Vale Inco to provide training, employment and business opportunities for members of local communities (including the engagement of local Labradoreans in caring for and monitoring Voisey’s Bay’s natural environment) , and to improve the provision of health care and other social services to those communities.

Vale Inco appears to have lived up to all of the commitments that it made.  For example, the company today reports that at the Voisey’s Bay mine site about 80% of its employees are Labradoreans and about 54% are aboriginals. It also points out that, even before the agreements made in 2002, it had contributed Cdn.$15 million to help build the Labrador Health Centre in Happy Valley-Goose Bay, Labrador, which, according to Vale Inco, “opened in 2000, boasts 30 beds and provides 24-hour care … to some 14,000 residents of central and northern Labrador communities”.

Vale Inco’s deals with the First Nations also created an impetus towards and a structure that facilitated the resolution of what had been long-outstanding land claims made by the First Nations against the provincial and federal governments.

Another promise made by Vale Inco was to test new, green “hydromet.” technology for smelting and refining nickel and cobalt.  Should the technology prove feasible, it would then commit to building, in Newfoundland and Labrador,  a full-scale commercial plant to treat the nickel and cobalt concentrates coming from Voisey’s Bay, and to extract from them refined metals.  Accordingly, Vale Inco built a pilot plant in Argentia, Newfoundland to test the new technology.  It worked just fine, and in November, 2008, Vale Inco selected hydromet. technology for use in the full-scale plant at Long Harbour, Newfoundland, which is to be up and running by 2012.  Vale Inco donated Cdn $20 million to Memorial University of Newfoundland for the development and operation of an “innovation centre”  at Memorial’s  St. John’s campus.

Vale Inco’s agreements with First Nations groups have become models for other mining projects around the world.  However, when Inco bought the Voisey’s Bay deposit in 1996, creating exemplary community relations did not seem to be on its agenda.  For example, native groups,  upset with what was happening, shut down exploration at Voisey’s Bay: in 1995,  by extra-legal means and, in 1997, with a court injunction. The company’s stance was to chastize First Nations groups for their “unrealistic” expectations. The First Nations’ response?  One of them vowed, “Inco will never mine Voisey’s”.
Years of tough negotiations ended the hostility between the mining company and the communities in which it sought to establish its mining project.  In 2004, as Vale Inco was preparing for production,  the President of one of the native groups, the Innu Nation, told a group of visitors to Voisey’s Bay that “this project has employed 130 Innu who would otherwise be on welfare.  The project has given our young people a future.  We own 51% of the cafeteria you’re in.  We own 51% of the airline you came in on, so our young people can now look forward to becoming pilots.  We’re the biggest employer now in Labrador.  Compare that with where we were four years ago.  It’s incredible.  It’s possible because we were able to sign a deal [with Inco]”.  The President of the other major native group, then known as the Labrador Inuit Association, added, “The rest of the world destroyed our lifestyle by doing away with the fur trapping and sealing industries … but now, thanks to our deal with Inco, things are looking very positive for the Inuit of Labrador.”