Cautious optimism: Voisey's Bay deal raises sustainability questions.

Sudburians are cautious and waiting to see the effect on the local economy, while Inco executives are trumpeting the success of the $2.9-billion Voisey's Bay project.

Bryan Beach, heavy-duty-equipment mechanic, works underground at Inco's North mine in Copper Cliff. While he says he does not feel threatened by the opening of Voisey's Bay now, he is concerned about the contract negotiations, which are slated for 2003. He questions whether Inco's administration will try to separate the mill and smelter workers from the mine workers so the Voisey's Bay ore can be refined regardless of how contract talks are going.

"What a lot of people are scared of is when they bring the ore in from Voisey's Bay, they may keep us out on strike longer and still be making the money," Beach says.

Inco Ltd. and the Province of Newfoundland and Labrador jointly announced on June 11 that they have entered into a statement of principles on the development of the Voisey's Bay nickel-copper-cobalt deposits in Labrador. The non-binding statement of principles with the province provides for the development of a $470-million (US) mine and mill/concentrator processing plant at Voisey's Bay, and a $120-million (US) research and development program in hydrometallurgical processing.

Dan O'Reilly, staff representative for United Steelworkers of America Local 6500, feels confident about the forthcoming negotiations.

"We don't think Inco can take a strike," O'Reilly says. "They are going to be spending a lot of money on Voisey's Bay. The price of nickel is going to be good and Inco is going to need the cash flow."

He is concerned, however, about Sudbury's long-term sustainability, and admits he is nervous, especially since the union asked Inco to put on paper their promise to begin mining new ore bodies in Sudbury, like the Kelly Lake and Totten deposits.

"We have not seen anything in writing that they are going to open those mines," O'Reilly says. "They haven't come out and said 'We are going to put x number of millions of dollars to develop these mines,' and our suspicion is any money they have for development is now going to Newfoundland."

Once Voisey's Bay is in full production and processing, O'Reilly expects the workforce in Sudbury to fall substantially.

In contrast, Doug Nadoronzny, general manager of economic development and planning in the City of Greater Sudbury, predicts Sudbury mines will work in concert with Newfoundland to assist in the development process, thereby sustaining jobs until the presence of Kelly Lake and Totten mine come into production. Yet, he says there may be some rocky roads ahead.

"(Inco) is bound to have some hiccups along the way," Nadoronzny says. "It's hard to imagine that they are not going to have to cut back on some of their other operations. I'm not so naive to think that nothing will happen in Sudbury."

Nadoronzny, like O'Reilly, believes Inco's funding is tied up with the Newfoundland project for at least 10 to 20 years.

"It's not likely Inco is going to spend hoards of money on local exploration, especially with the magnitude of the project in Voisey's Bay," Nadoronzny says.

However, Nadoronzny says he thinks Inco will mine Kelly Lake and Totten properties, simply because of the infrastructure existing in the area.

Scott McDonald, Inco's general manager for Ontario operations says "properties like Kelly Lake and Totten will no doubt be major contributors to Inco's Sudbury fortunes for many years to come."

In fact, he says by entering into this agreement with Newfoundland, it has saved Sudbury from job loss.

"The point is that Voisey's Bay concentrate provides a very economic feed source at a time when it is needed to preserve jobs at Inco in Sudbury," McDonald says.

The new development allows Inco to ship about 355,000 tonnes of concentrate, starting in 2006, to the Sudbury and Thompson facilities for processing until the Newfoundland hydrometallurgy plant is completed in 2011. This will allow Inco to help fund the Voisey's Bay project. At this time Inco anticipates a slowing of production in some of their mature mines like Frood and Crean Hill. Processing the Voisey's Bay ore in Sudbury will maintain refinery production and buy time for the possible opening of new mines such as the Kelly Lake and Totten sites, McDonald says.