TORONTO (miningweekly.com) – Nickel-miner Vale Inco has reached an agreement with the government of Newfoundland and Labrador on plans to build a new nickel processing plant in the Canadian province, and concentrate shipments from the company's Voisey's Bay mine will resume "immediately" a company spokesperson said on Thursday.

The province has agreed to give Vale until February 2013 to complete the hydrometallurgical plant, which will process concentrates into refined nickel.

According to a 2002 development agreement, the project was scheduled to start nickel production in early 2012, but, because of the complexity and size of the project, Vale indicated in a draft implementation plan submitted in December that it would need an additional 14 months to complete the plant.

"The Long Harbour processing plant is a larger and more complex undertaking than envisioned when the Voisey’s Bay development agreement was signed in 2002," the company said on Thursday.

The firm agreed earlier this month to stop shipping concentrates from the huge Voisey's Bay mine to its Canadian smelters while talks with the province were under way, after no deal was reached on the implementation plan by the extended deadline of January 22.

Shipments will now resume immediately, communications and public affairs director Cory McPhee said on Thursday afternoon. Mine production had not been affected, he confirmed.

“We have been able to reach agreement with the province to submit the final implementation plan for the processing plant on February 27, 2009 following which we will begin work at the site,” said Vale Inco Newfoundland and Labrador president Bob Cooper.

Initial work on the project is expected to get under way in April, the province said in a separate statement.

The nickel-miner has agreed to remove a clause from the agreement that would have enabled it to halt construction if it could not find enough skilled labourers.

Vale also has consented to various milestones for the construction process, as well as to complete its second-stage feasibility study for underground mining at Voisey's Bay by June 30, 2011.

The company has also agreed that it will pay the island industrial rate for its power supply, surrendering its option to have a better rate should other industrial customers obtain a better rate for whatever reason.

"When we entered into discussions four weeks ago, it was important to us that we reach an agreement that provides greater assurances around the project, protects the public interest and gives us enhanced benefits," said Newfoundland and Labrador Premier Danny Williams.

"We are confident we have achieved that.".

Brazilian mining group Companhia Vale do Rio Doce acquired the Voisey's Bay assets when it bought Canadian nickel group Inco in 2006.