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Vale greenlights US$1.7B expansion at Voisey's Bay

Vale SA is moving ahead with a US$1.7 billion expansion of its Voisey's Bay nickel-copper-cobalt project in Newfoundland and Labrador as it seeks to capitalize on increasing demand for battery minerals, the company said in a June 11 news release.

The company revived a plan to develop an underground mine at Voisey's Bay, which would extend its life by at least 15 years. Initial production from the underground mine is expected by April 2021.

"Our operation in Voisey's Bay is a huge source of pride for Vale, and we have always been intent on going underground there as it is the natural evolution of our operations in Newfoundland and Labrador," said Eduardo de Salles Bartolomeo, head of Vale's base metals division.

The expansion is enabled by Vale's agreement to sell a total of 75% of cobalt production from Voisey's Bay to Wheaton Precious Metals Corp. and Cobalt 27 Capital Corp. for a total of US$690 million, beginning in 2021.

Vale CEO Fabio Schvartsman recently said the company was holding off on investments in nickel mines in Canada and New Caledonia and intends to return the excess cash to shareholders to avoid any wrong decisions.