Although Newfoundland said it had not yet reached a deal with Inco, the company's proposal marks an about-face in its plans for the project, seen as having a 25- to 30-year life span. Inco had been in an impasse with the province, with the company steadfastly insisting it would process ore from the huge base metals deposit outside the province.

In a briefing to the province's cabinet, mines minister Roger Grimes said Inco was poised to build "a leading edge hydrometallurgical plant" in the province to process nickel metal. The plant would be the first of its kind in the world.

Although the proposal sets the stage for the launch of more formal talks, which could lead to the province granting a mining permit for the Voisey's Bay deposit, the minesMinister cautioned that approval of the plan was far from complete.