Despite the global economic chill, mining giant Vale Inco is pushing ahead with a $2.2-billion plan to build a nickel processing plant in southern Newfoundland.

Work on the Long Harbour site formally started Monday, launching a four-year construction plan that will need a peak of 1,600 workers by 2011.

Even though nickel prices are in a slump, Vale Inco said Monday that proceeding at full steam with the hydromettalurgical plant, which will use water, oxygen and acid to separate metals from concentrate shipped from the Voisey's Bay mine in northern Labrador.

Crews moved on to the site on the weekend.

"I think that marks a pretty important milestone for us, as we move forward with the project in Long Harbour," said Vale Inco corporate affairs manager Bob Carter.

Nonetheless, Carter acknowledged that the project, which Vale Inco promised to build following completion of a test hydromet facility in nearby Argentia, is proceeding under gloomy economic clouds.

"Anybody involved in business is looking very closely at what's going on. Our industry has been affected by changes that are occurring globally," Carter said.

The project is enormous by most standards. When completed, the plant will have a footprint 40 times the size of the Mile One stadium in downtown St. John's.

Company will look for skilled workers

To pull off the project, Vale Inco will be recruiting for scores of skilled trades workers, and is anticipating shortages, in particular, with pipefitters and electricians.

The economic crisis, though, may actually help Vale Inco with its recruitment. Because of the sudden downturn in the Alberta oilsands, hundreds of workers from Newfoundland and Labrador who would ordinarily be away are now home, and have been calling for work.

"That should be a benefit for us as we move forward looking for the trades that we need," Carter said.

Vale Inco will award 45 major construction contracts during the construction of the processing plant, and some construction and service contracts have already gone to local companies.

The immediate goals for crews are demolition of the old port site at Long Harbour and the ensuing cleanup.