Questions swirl for proposed Alderon mine

James McLeod
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Natural Resources Minister Derrick Dalley is saying that the industrial electricity landscape won’t necessarily be changing in Labrador City, even with the announcement that the Wabush mine has been idled

For weeks, Dalley has been expected to make an announcement about a third electrical transmission line from Churchill Falls to Labrador West to facilitate mining expansion, but with the Wabush mine announcement, it throws the situation into doubt.

Alderon Iron Ore has said that it needs the certainty on electricity supply in order to get financing for its Kami mine project, which is forecast to employ hundreds of people.

Back on Jan. 24, Dalley told reporters that a decision on the electrical line was coming soon.

“We’ve had considerable discussion on that issue both with Alderon and others. We’ve had tremendous response, I think, in terms of letters of support to proceed,” he said. “I do expect that we will have a decision within the next week or so.”

Nearly three weeks later, there is still no decision from Dalley. In the meantime, representatives from Alderon have been saying that the delay could jeopardize the mine, because they need to secure financing for it to proceed.

Last Friday, Premier Tom Marshall told reporters, “I think I can say, safely, that there will be power available in that community to support future economic development to meet the needs of electricity. But at this time, I can’t go into particulars, and the reason for that will become evident shortly.”

When the announcement came Tuesday about the Wabush mine closing, it looked like Marshall knew the announcement was coming, and that the power would be diverted to the Alderon project.

But Dalley said that’s not the case.

He said the government knew the mine was in a dire spot as far back as Jan. 28, but they only found out about the closure on Tuesday, the same as everyone else.

And Dalley said they’re not willing to talk about shifting.

“They’re not closing. They’re going to need power. The power is an asset in terms of trying to sell the mine,” he said. “We’re certainly not going to strip that away.”

So, where does that leave the Churchill Falls transmission line?

There’s still no decision, Dalley said, and the delay seems to be tied up somehow with the Wabush mine.

Dalley and Marshall are headed to Labrador today to talk to people affected by the mine closure. Dalley said he doesn’t want to say too much about the situation in the media until he talks to people in Labrador West, and that includes details around the Labrador transmission line.

“I can share more details with you probably tomorrow,” Dalley said.

But one person who’s talking is Mark Morabito, chairman of the Alderon Iron Ore board.

He was on Twitter, saying that regardless of the Wabush mine situation, they need that power line for energy certainty. He said the Wabush block of power isn’t enough for what Alderon needs.

But he did offer one bit of comfort for the people of Labrador West.

As far as employment from the Wabush mine, if the Alderon project goes ahead, he said “we can replace all of those jobs and then some.”



Organizations: Iron Ore

Geographic location: Wabush, Labrador West, Alderon Iron Ore

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Recent comments

  • Virginia Waters
    February 13, 2014 - 09:06

    Let's hope what results from these negotiations is evidenced by the sharp legal, money-wise, taxpayer-conscious mind of the premier not that of a leader influenced by corporate pressures and partisan loyalties. The closure of Wabush, like Wabana and Buchans before it, should act like a brown bag for those hyperventilating their enthusiasm for spending hundreds of millions of public money to hook up Alderon. It might be a 'no-brainer' when it's not your own money, but this province has a long sad, sometimes sordid history of being suckered into deals that weren't fiscally sound or affordable. If there is to be a hook-up subsidy for Alderon - and that in itself is debatable - then let it come as a monthly offset against its electric bill in lieu of Alderon underwriting construction of the line. upfront. That puts the risk where it squarely belongs. Let government reserve cash incentives for business - careful, prudent ones at that - for renewable industries. And if Wabush is to shut down for good, let government reassure us that we are not faced with yet another environmental or land reclamation liability.