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September 19, 1997
(Executive Council)

Premier Brian Tobin issued the following statement today in response to Inco's announcement that the Voisey's Bay project initial production would be delayed:

Earlier today, Mike Sopko, Chairman and Chief Executive Officer of Inco Limited, said that the initial production from the Voisey's Bay mine and mill facilities will be delayed by at least one year.

The statement by Mr. Sopko confirms what I and many others have been saying for months. The company's start-up date was an optimal one. Given the delays in land claim negotiations and negotiations of Impact Benefit Agreements, the project start-up date was unrealistic.

The delay points to the need to organize our efforts to ensure the project moves ahead. Close cooperation is required between the federal and provincial governments in areas such as environmental assessment and aboriginal land claims negotiations. To this end, we appointed a provincial coordinator for the Voisey's Bay project in August, Mr. William (Bill) Rowat, who is seconded from the federal government where he served most recently as the deputy minister of Fisheries and Oceans. The Voisey's Bay nickel find is one of the largest of its kind anywhere in the world. The project will play a large role in the development of our province's economy in the future. Thousands of Newfoundlanders and Labradorians look forward to employment opportunities, and many small and large businesses alike await the spinoff benefits from this mega project. It is for this reason that all parties must work together to ensure the project moves ahead in a timely and responsible fashion.

It is worth noting that Inco also announced earlier this week that it will be proceeding with the next stage of the Goro nickel project in the French Overseas Territory of New Caledonia. Inco clearly has other options for nickel development elsewhere in the world. This underlines the importance for all parties to work together to bring negotiations to a rapid and fair conclusion.

Some of you will wonder what direct impact the delay in the project will have on our provincial budgetary outlook. Our three-year projections for 1997/98, 1998/99, and 1999/2000 did not include any mineral tax revenues as the company would still be in the pre-production stages where no mineral taxes are collected. With respect to other taxes, for example payroll tax and personal income tax, the one year delay means that government will receive these revenues one year later, for a net deferment during the three years of about $10 million. Government will now take another look at its mid to long-range economic forecasts to determine what impacts the delay would have on our economy in the future.