Today in Canada, Xstrata mines nickel ore in Sudbury, Ragland and near Timmins. All this ore is processed in Xstrata mills and then in the smelter near Sudbury. The enriched product from the smelter is sent to Norway for final refining. This configuration seems stable, but Xstrata I think always will be looking for more nickel ore to process as their mines are not of the same size as those of Vale Inco.

Vale has a full plant in Thompson, Manitoba and Sudbury, as well as mine and mill in Voisey's Bay, Labrador. Presently the nickel concentrate from Voisey's Bay is shipped to either Sudbury or Thompson for final processing. However, Vale will be building a plant near Argentia in New Foundland to process the concentrate from Vosey's Bay. This will start in about 3 years and forced upon them by the NF provincial government for jobs and taxes. This forces Vale to spend more than 2 billion that is not necessary if all the concentrate would be continued to ship. As some know, NF was shafted by Quebec Hydro in a long term power deal and politically they insisted on building the nickel plant in NF. Long term this is good for any ROF nickel concentrate coming on stream in the twenties since no feed will come from Voisey's Bay

By 2014 both Vale and Xstrata face much strickter SO2 emission limits. They will have to spend mega dollars to meet the new limits. This also applies to Hudson Bay copper smelter in Flin Flon, Manitoba. THudson Bay has threatend to shut down the smelter if these regulations are indeed implemented. If Vale's Thompson smelter shuts down while the mine and mill will be running, that of course will decrease demand for new feed to the Sudbury smelter. It is hard to see the Manitoba government forcing the shut down of these smelters mainly from a social and employment point of view.

Another thing to remember is that the Canadian goverment will in general not allow ore or concentrate to be shipped out of the country due to loss of jobs and taxes(same as NF). To build a new smelter-refinery of decent capacity costs today 3 to 5 billion. This effectively means that concentrate from ROF most likely will be processed either in Sudbury or Thompson smelters. No one else can compete if they have to build a new smelter

To sustain at least 20 years of mining at least 50-100 million tonnes of nickel ore will have to be found. This nickel mining will force the development of all infrastructure and set-up of a small community. With all this in place, the chrome ore also should become economic. With all the chrome ore around it should be easier to convince governments and people in the area that this is not just a quick money grab, but a substantial long term viable project. So if nickel mining can get going, depending on chrome supplies and prices at that time, the ROF should have a long life.

Even today after 100 years of mining in the Sudbury area, new deposits are found, For sure this will also happen in the ROF area.

The main problem now is that so far there just have not been found enough nickel ore, but then again exploration is still extremely young. These things normally takes multiple years. In the mean time the SP will fluctuate, drift down, rebound etc. Personally I don't expect too much in the near future, but I am pretty convinced that if indeed exploration will be allowed to continue for another 5 years or so, significant amounts of ore will be discovered. Right now of course all metals have fallen off the cliff, but that will also eventually change.

The only fundamental issue I see is that this is a huge wetland making everything difficult and expensive. But with enough nickel ore together with chrome as well as decreasing supplies from the Thompson and Sudbury area, this development should see life some time

Only time will tell