January 29, 2009 / 10:28 PM / in 9 years

UPDATE 1-Voisey's Bay resumes nickel shipments-Vale

(Updates with resumption of shipments, in U.S. dollars)

TORONTO, Jan 29 (Reuters) - Vale Inco (VALE5.SA) will restart concentrate shipments from its Voisey’s Bay nickel mine in Eastern Canada after reaching an agreement on Thursday with the province of Newfoundland and Labrador over a proposed nickel processing plant.

Vale had agreed to start holding back shipments of concentrate to smelters in Central Canada after the two sides missed a deadline to come up with a construction schedule for a low-cost hydro-metallic processing plant in the province.

In a statement, the Brazilian miner said it had reached an agreement-in-principle with the province that sets out a 43-month construction schedule to complete the plant in February 2013.

The timeline is about a year longer than originally envisaged.

“Despite the difficult economic times we continue to remain fully committed to the project and to the province,” Vale Inco chief executive Tito Martins said.

Vale acquired Voisey’s Bay when it took over Inco in 2006.

Voisey’s routinely stops shipping for six weeks in December and January each year, and had planned to delay the restart of shipments until the agreement was reached.

Vale smelters in Thompson, Manitoba and Sudbury, Ontario, which receive the concentrate, have been working through stockpiled concentrate.

The company has said the plant should cost about $2.2 billion and produce about 50,000 tonnes of finished nickel per year. (Reporting by Cameron French; Editing by Jeffrey Hodgson)

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