While we are waiting for the price to catapult back up, I can't help but look ahead by looking back. In 1994 Voisey's Bay was discovered , Teck bought a 10.4% stake in Diamond Field Resourses, INCO and Falconbridge fought it out for ownership and INCO won the day. The Newfoundland government wanted a smelter built in the province while INCO initially wanted to ship all the concentrate to Sudbury. What resulted was an agreement in 2002 that a smelter would be built on the island of NL in Argentia. The total cost of mine infrastructure, mill and concentrator, transportation infrastructure and the smelter would cost approx. $2.9 billion in 2002 dollars. INCO had permission to ship up to 335,000 tonnes of nickel concentrate to Sudbury while the research on hydromet technology was being done and the smelter was being built.

There are a couple of interesting things here. First, it appears that it was economical to ship concentrate from Labrador to Sudbury at 10 year old prices. Secondly, INCO's commitment to the Hydromet research, pilot plant and subsequent smelter was estimated to be approx one billion.

We can surmise from this VALE-INCO would be all over NOT given that they are much closer to Sudbury than Voisey's Bay. The investment in infrastructure should be at least a third less because a smelter is not required. This has to figure in the economics of developing the orebodies. It will be lots of fun watching the posturing of the majors once the resource calculation (43-101)is done.