Vale Inco Nouvelle-Calédonie

Vale Inco Nouvelle-Calédonie S.A.S. is responsible for the commercial mining of the nickel and cobalt deposit in the Goro plateau in the south of New Caledonia’s main island (Known locally as “Grande Terre”). The laterite deposit at Goro has one of the highest nickel contents in the world. The mine and the processing of ore on site will have a major economic impact on the prosperity of New Caledonia.

Reserves and Resources

Proven and probable reserves in the initial mining zone on the Goro plateau amount to 120 million tonnes with an average nickel content of 1.48% and cobalt content of 0.11%. Measured and indicated resources are estimated at 75 million tonnes with a nickel content of 1.49% and cobalt content of 0.12%. These estimates come from studies carried out at the end of 2005.

Processing

A hydrometallurgical process will be used to extract the nickel and cobalt from the ore. This is the only technology which is suitable for profitably processing laterites with low nickel content. Up until now, such laterites have not been mined from the Goro plateau. Vale Inco Nouvelle-Calédonie will therefore produce nickel at a low cost and contribute significantly to increasing exploitable resources in New Caledonia.

The mining and industrial complex at Vale Inco Nouvelle-Calédonie

The project comprises the following:

• An open-cast nickel and cobalt laterite mine
• An ore preparation unit
• A processing plant which will use a hydrometallurgical process which has been developed by Inco
• Equipment for processing liquid and solid residues
• A safe system for the storage of neutralised solid residue
• An innovative and safe system for the disposal of effluent at sea, when neutralised
• Accommodation facilities for workers
• A training centre at the pilot plant
• A port on the east coast of Prony Bay
• A coal-fired power station
• A plant nursery responsible for the replanting programme

The construction period should take approximately three years, from January 2005 to 2008. The plant will be made up of 400 modules which are currently being delivered to the site for assembly having been, in the main, built and pre-assembled in the Philippines.

Local involvement

Vale Inco Nouvelle-Calédonie and Inco believe that it is of paramount importance to integrate harmoniously with the natural, physical and human environment in New Caledonia. They will make sure, in particular, that neighbouring communities benefit positively from the project.

To this end, particular effort is given to job creation for local people and to awarding contracts to local companies. In addition to the hundreds of temporary jobs during the construction phase, 800 permanent jobs will be created to ensure that the factory is kept in constant production; 90% of these posts will be held by the people of New Caledonia. It is estimated that approximately 3,000 other jobs - indirect and secondary - will be created locally because of the project and that these will last for some 30 years, more if mining takes place at other deposits when reserves at Goro are exhausted. Vale Inco Nouvelle-Calédonie also works on developing community initiatives in collaboration with its neighbours.

Protection of the environment

The impact on the natural and physical environment will be significantly reduced thanks to the modified hydrometallurgical process (which will have less impact on the environment than more traditional processes), and to forward thinking and rigorous environmental policies and practices. Vale Inco Nouvelle-Calédonie will conform to the local regulations in force and to internationally recognised standards.

Such choices are not dictated purely by a heightened sense of responsibility on the part of the management at Vale Inco Nouvelle-Calédonie and Inco, or a keener awareness of environmental matters than has been the case in the past. They are also based on sound business decisions. Just like the whole international community, investors understand the risks involved if a project does not respect global standards in terms of sustainable development and they are more reticent to invest in a project if this is the case.

Sustainable development

Like Inco, its main shareholder and technological partner, Vale Inco Nouvelle-Calédonie adheres to the principle of sustainable development as adopted by the UN. "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs". Its approach to development is rooted firmly in this global principle and aims to establish the best possible balance between the environmental, economic and social aspects of its project.