Our commitment to maximizing local business opportunities is driven by a sense of social responsibility as much as it is by a strong business case. There are long-term benefits associated with developing a strong base of local suppliers in the communities where we operate. It’s a win-win situation for VBNC, its contractors and the employees who work with them.

“VBNC has honoured its commitment to maximize procurement and contracting opportunities for Newfoundland and Labrador companies, for both the construction and operations phases of the Voisey’s Bay project. In fact, we have exceeded our targets in both cases”, said Joe Shirley, Project Director responsible for construction of both the Labrador and Argentia projects.

During 2005, expenditures in Newfoundland and Labrador totaled approximately $396 million. Newfoundland and Labrador companies received 80 per cent of total expenditures including Aboriginal companies, who were awarded substantial contracts in Labrador. The mine and concentrator accounted for 73 per cent of total expenditures with the Demonstration Plant accounting for 27 per cent.

During construction of the Demonstration Plant, a substantial number of contracts and purchase orders were awarded to provincial suppliers, some to contractors in the Argentia area and various others around the province. In addition to the successful enhancement of fiberglass reinforced plastic (FRP) capacity in the province (see sidebar), we worked closely with a number of fabrication shops to build many of the process modules for the Demonstration Plant. A total of 14 of 22 process modules were fabricated locally, most within one kilometer of the Demonstration Plant.

Contracts were also awarded to local companies for civil works on residue ponds, a sewage treatment plant, pumphouse, assay lab and changehouse, propane and oxygen supply, and the mechanical, piping, electrical, instrumentation and controls (MPEIC) inside the process plant. Security and support services contracts were also awarded to local companies.

Local expenditures continue to be strong in the operations phase. In fact, about 80 per cent of operations phase procurement contracts have been awarded to companies in Newfoundland and Labrador.

“A solid base of local suppliers to support the company is key to plant efficiency during the operating phase,” said Joe Shirley. “We will continue to work with potential suppliers to enhance their capability through the hydromet R&D phase and into development of the commercial plant.”

In Labrador, there was an emphasis on developing a strong base of Aboriginal supply and service companies, a commitment that was upheld by our insistence that companies with Aboriginal ownership would receive first consideration for procurement contracts. And VBNC was successful in this regard, with Aboriginal companies being awarded in excess of $500 million ($ Canadian) in procurement and construction contracts during construction.

 “The industrial benefits are not about providing guarantees,” said Bob Cooper, General Manager of the Mine and Concentrator. “They are about creating opportunities. And it us up to Aboriginal businesses to take advantage of these opportunities. They have to provide the service, quality, product and price that we would expect from any other supplier. We gave them the first opportunity to do that, and we are extremely pleased with the outcomes. Aboriginal businesses have truly risen to the challenge.”

There was a strategic approach to the procurement process for construction of the mine and concentrator, Cooper explained.  “It was a capacity building exercise, just as it was for the hiring of our people,” he said. “We took advantage of business opportunities during construction to prepare our suppliers for the operations phase. And we were quite successful, with 80 per cent of our operations phase procurement contracts in Voisey’s Bay awarded to businesses in Newfoundland and Labrador.”

The majority of Labrador suppliers have Aboriginal ownership, including Sikumiut Environmental Management (see sidebar), Shuashim Group Limited (welding gas, lab gases and supplies), Innu Mikun (air transportation), Atlantic Safety Centre (security), Torngait Services Inc. (site services), Innunuk Traders Limited Partnership (electrical supplies), Minaskuat Limited Partnership (tree cutting, environmental support), and others.

“There is a Business Development Committee in place – a  joint effort between the Innu, Inuit and VBNC – which works to expand and grow Aboriginal businesses in and beyond Voisey’s Bay,” said Cooper. “We’ve been quite successful in this regard, with almost half of the employees on site contracted through Aboriginal businesses.”