A nickel-refining test plant in southern Newfoundland will close in June, three years before a permanent facility will open to process nickel mined at Voisey's Bay, employees have been told.

Vale Inco confirmed its plan to close the Argentia demonstration plant in a letter sent to about 130 workers on Monday.

Bob Carter, public affairs director with subsidiary Voisey's Bay Nickel, told CBC News on Wednesday that all employees are being offered other jobs or training opportunities with the company's operations in Canada and at its Goro project on New Caledonia, an island in the Pacific Ocean.

Carter said the employees could also work at the nickel processing plant planned for nearby Long Harbour, which is expected to open in three years.

The demonstration plant formally opened in October 2005 to determine the feasibility of hydromet technology — a water-based processing system that is touted as being cleaner than conventional refining, but untested on the type of ore at Voisey's Bay.

Vale Inco still has yet to choose between hydromet technology or conventional refining.

The mine at Voisey's Bay, in northern Labrador, began production in 2005. It is considered one of the world's best finds of nickel, as well as cobalt and copper.

Under the terms of its agreement with the Newfoundland and Labrador government, Inco committed to process ore within the province. Because Voisey's Bay Nickel has been shipping concentrate from the mine for processing in other provinces for more than two years, it has agreed to process an equivalent amount once the Long Harbour refinery opens.