(CBC)

Residents of a small town in southern Newfoundland are enthusiastic about mining giant Vale Inco's $2-billion plans to refine nickel in their community.

Vale Inco will begin construction next year in Long Harbour on a hydromet processing plant that is expected to start refining nickel concentrate — extracted from the giant Voisey's Bay mine, in northern Labrador — in 2012.

Long Harbour Mayor Gary Keating said the decision will transform the small community, which the 2006 census found had just 211 full-time residents.

"Being the mayor of a small town, with a project that's going to invest in excess of $2 billion during construction — [that] has to be a thrill for any mayor," Keating told CBC News.

More than 3,000 people are expected to work at various stages of the project, with an average of about 1,600 people employed each year during the next three years.

Keating said the hydromet plant, once it's operational, will result in long-term benefits, as well.

Gary Keating: 'Being the mayor of a small town, with a project that's going to invest in excess of $2 billion during construction — [that] has to be a thrill for any mayor.' (CBC)

"We're talking 450 permanent jobs, so we're quite optimistic that we will retain a portion of those people to live in the community in which they work," Keating said.

Keating said training programs will be offered for area residents, and he expects that many people who worked at the demonstration plant in neighbouring Argentia will be hired at the new project.

Cec King, who operates a small fabrication company in Long Harbour, said Vale Inco's decision is excellent news, even for the immediate future.

"I'm going to be looking for, definitely, like 12 people," said King, adding that he eventually would like to add nearly four times that number of workers over the coming years.

King warned, however, that the hydromet project will be competing for skilled labour that has been hard to find — particularly as many local workers have migrated to Alberta, to work in the oil industry there.

"When the times comes for me to start looking for some welders and pipefitters, I'm going to have to pay these guys bigger money," he said. "So I got to, you know, go bigger or stay home. [That's] basically what it amounts to."

Inco picked the Long Harbour site in 2006, after rejecting a long-standing plan for the site in Argentia. Vale Inco selected a site in Placentia Bay in part because it offers a year-round ice-free access for shipping in concentrate and shipping out refined product.

Long Harbour has not had a large industrial employer since 1989, when the old ERCO phosphorous plant closed down.