Vale SA [VALE-NYSE] is placing its Voisey’s Bay nickel mine in Labrador on “care and maintenance” for the next four weeks due to the global COVID-19 virus outbreak.
The Brazilian mining giant said the move is a precaution to help protect the health and well-being of Nunatsiavut and Innu indigenous communities in Labrador, as well as its own staff due the fly-in nature of the remote mining operation.
“Although none of our employees has tested positive for coronavirus at any of Vale’s global operations, Vale has taken this preventative action because of the unique remoteness of that area, with fly-in and fly-out operations, with higher exposure to travel,” the company said in a prepared statement. “Vale will work together with the communities and authorities to ensure our operations do not act as a catalyst to inadvertently introduce the virus in these communities.”
Vale is the world’s largest iron ore producer and one of the world’s largest diversified miners, along with BHP Billiton Ltd. [BHP-NYSE; BHPLF-OTCPK] and Rio Tinto Plc [RIO-NYSE].
Operations at Vale’s open-pit mine and concentrator at Voisey’s Bay began in 2005. The 6,000 tonne-per-day facility produces two types of concentrates: nickel-cobalt-copper concentrate and copper concentrate.
Nickel concentrate produced at Voisey’s Bay is currently processed at Vale’s hydrometallurgical processing facility in Long Harbour, Newfoundland.
As Voisey’s Bay is a fly-in-fly out operation, significant infrastructure is required to support the mine and concentrator and to ensure a safe and comfortable living environment for the people that work at the site.
In June, 2018, Vale said it was moving to capitalize on a buoyant nickel price by proceeding with development of an underground mine at the Voisey’s Bay operation.
Construction of the underground mine aims to extend the operating life of Voisey’s Bay by at least 15 years, resulting in close to $2 billion in capital investment by Vale, and the creation of 1,700 in jobs at the underground mine and Long Harbour processing plant;
First ore production from the underground mine is expected no later than April 2021 and provides for continuity of operations at the Long Harbour processing plant.
Since Voisey’s Bay is located in an area subject to land claims by both the Innu Nation and Nunatsiavut Government, the company has negotiated separate impact and benefit agreements with these two aboriginal groups.
As a result, approximately 80% of the operations support contracts at the Voisey’s Bay mine and concentrator are with aboriginal businesses.
On Tuesday, Vale shares jumped 6.71% or 53 cents to US$8.43. The shares are currently trading in a 52-week range of US$14.19 and US$6.62.
Overall, as Europe and the United States are hit more by the novel coronavirus, demand for metals is likely to temporarily fall and that is expected to keep prices under pressure unless production cuts are announced, Scotiabank said in a report.