Energy Minister, MHA issue statement

Charles Furey, Minister of Mines and Energy, and Perry Canning, M.H.A. for Labrador West, today released the following statement.

Various reports in the Quebec media have speculated about the investment plans of North/IOCC and about the reactivation of its idle pellet plant at Sept Iles. Because the shareholders of North/IOCC are publicly traded companies on the Canadian, Japanese and Australian Stock Exchanges, any capital expenditure decision would have to be released immediately.

The Government of Newfoundland and Labrador has been in close contact with North/IOCC over the past year or so with regard to its future investment plans for Labrador City. We know that since North acquired majority interest in IOCC in April, 1997, the company has been focused on new investment in its operations in Labrador West. It is important to note that while no official decision has yet been taken by the board of directors of North/IOCC, government has taken steps to research the factors which influence these decisions and has sought independent, third-party expert advice. Hatch Associates, an international consulting company with expertise in the iron and steel industry, has been mandated to review these factors and advise government. That report has now been received and government accepts its conclusions.

Mr. Furey and Mr. Canning have met with USWA Local Union 5795 to review the findings of the Hatch Report and to brief them on the factors which may affect the North/IOCC decisions. owever, because the owners of IOCC are publicly traded corporations, it is not possible for us to release any of that information at this time.

The Government of Newfoundland and Labrador is pleased with North's approach to its operations in Labrador West since it acquired majority ownership in 1997. North invested $230 million to acquire majority ownership. Since then it has invested a further $115 million to modernize and expand the operations in Labrador West. Further, it has initiated a no-layoff policy and has adopted a student summer employment program hiring 120 local students last summer. North/IOC also contributed $650,000 to the Memorial University Opportunity Growth Fund. This contribution will be used to enhance MUN's distance education initiatives in Labrador West as well as to provide financial support to students from Labrador. This is clear evidence of North/IOCC commitment to Labrador West. The company has also committed to purchasing 60 per cent of supplies from Labrador West.

We are similarly confident that when the board of directors make their decisions on the new total Capital Investment Program in the coming weeks it will be, on balance, very positive for the future of Labrador West.

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