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Photo: Wabush Mines. 
Open-pit mining at Wabush Mines.

 

Both iron ore companies will invest to improve their productive capacities.  Iron ore production and prices to increase significantly.  Gold production to increase.  Inco will continue its surface exploration program at Voisey’s Bay.  Nickel prices to remain above US $3.50/lb.

 

 

Share of 1999  Mineral Shipment Value   Percent Metals 94.0%    Iron Ore 92.0%    Gold 2.0% Industrial Minerals 1.3% Structural Minerals 4.7% Note: Industrial Minerals include antimony, barite, dolomite, gypsum, peat & pyrophyllite. Department of Mines & Energy; Economics & Statistics Branch, Department of Finance

MINING

Reduced demand in key markets resulted in a 24% decline in the value of mineral shipments to $833 million in 1999. A strong rebound is expected this year.

Iron Ore
Price and volume reductions for iron ore, which typically account for over 90% of the Province’s mineral shipments, were the major cause of the decline in mineral shipment value and employment last year. Improvements in the North American, European and Asian steel industries in 2000 are expected to boost demand and enable prices to rise by between 5% and 7%. Iron ore shipments are anticipated to recover to near 1998 levels. The Iron Ore Company of Canada (IOCC) and Wabush Mines continue to make significant capital investments designed to increase the capacity and efficiency of their operations in the Province. IOCC is in the midst of a multi-year investment program, spending $650 million on improvements to its Labrador West operations. Capital improvements at Wabush Mines in 1999 increased its capacity by 17%.

Gold
Gold is the Province’s second most significant mineral. The value of gold shipments in 1999 declined due to lower market prices and reduced production. Shipment value is expected to rise by 3.2% in 2000 due to increased production at Richmont Mines’ Nugget Pond mine on the Baie Verte Peninsula.

Structural Minerals
Structural minerals such as cement, sand and gravel, aggregate stone, dimension stone, limestone and brick, are used in construction and manufacturing. The value of structural minerals declined marginally in 1999 due to reduced production of limestone and dimension stone. These minerals, while small in terms of shipment value, add employment and diversity to local economies.

Exploration and Development
Exploration expenditures surged following the discovery of the Voisey’s Bay deposit in 1994 and peaked in 1996 at $93 million. Reduced nickel exploration in Labrador, however, brought total expenditures down to $33 million in 1999. Spending is expected to drop further to $23 million in 2000; however, this is still well above historical levels recorded prior to the exploration boom triggered by the Voisey’s Bay discovery.

Government is moving to ensure the continued success of the mining industry by supporting mineral exploration and facilitating commercial development. Government began funding in 1999 for a multi-year $12 million Mineral Exploration Program to facilitate increased exploration and assist junior mining companies. This program is cost-shared with industry. Progressive legislation was also passed that establishes clear responsibilities and obligations for both government and operators, and formalizes practices related to the orderly planning, development, operation, rehabilitation and closure of mines.

Voisey’s Bay
Progress has been mixed on Voisey’s Bay, one of the richest, lowest-cost nickel deposits in the world. The mine/mill project was released from the joint federal-provincial environmental assessment process in August 1999, and progress was made in the negotiation of impact and benefit agreements (IBA) between Inco, the Innu Nation and the Labrador Inuit Association. Nickel prices rebounded from US$1.94/lb in January 1999 to US$4.38 in February 2000. Despite this progress, talks between Inco and the Province were suspended in January 2000. Inco had proposed construction of a pilot facility to test a new hydrometallurgical processing technology but would not commit to full processing in the Province in the event that this technology did not prove viable. Government maintains the position that full processing of nickel concentrate must occur within the Province.

Photo: Richmont Mines. 
Nugget Pond Gold Mine on the Baie Verte Peninsula