The following statement was issued today by Lloyd Matthews, Minister of Mines and Energy. It was also read in the House of Assembly:

Update on the Voisey's Bay negotiations

I would like to take this opportunity today to update honourable colleagues on the status of negotiations with Inco was to arrive at a commercial agreement on the Voisey's Bay Project.

Mr. Speaker, I will begin by stating that this government will only agree to a commercial agreement that encompasses the principles the people of this province endorsed when they gave government a mandate to negotiate a deal during that last provincial election. I can assure the honourable members that any deal we negotiate will be true to these principles and will be in the best interest of the people of this province. 

The fundamental position of government to ensure full processing of the Voisey's Bay ore to a final nickel product has not and will not change.

Government returned to the table following a determination that Inco understood our fundamental positions and that they too were interested in arriving at a commercial arrangement at the earliest possible opportunity.

Overall, the negotiations have been going well since government and Inco returned to the table on June 18th. There has been frank and open discussion of all relevant issues. As part of the process, Mr. Scott Hand, Deputy Chariman and CEO of Inco, and I have met regularly to discuss issues that have arisen at the negotiating table and to provide leadership and direction to our respective teams.

The process has been intense as we moved from outlining the key issues required for an agreement to negotiating specific components. 

I am pleased to report that we have been able to resolve most issues. There are essentially two major issues outstanding. These issues are also of fundamental importance to this province.

The first issue is around the possible movement of concentrate. That is to say, if some concentrate needs to be shipped from the province while the processing facility is being developed, we are seeking to ensure that over the life of the processing facility an equivalent amount of concentrate will be returned to the province for processing. 

The second issue concerns the possible terms of the shipment period. This means the time period in which the government might allow Inco to ship concentrate from Voisey's Bay while the processing facility is being developed.

Until an agreement is reached on these and other outstanding issues, we do not have a final commercial agreement. 

The September 11th terrorist attack on the United States is having an adverse effect on the global business and investment community. Low metal prices were already hurting Canadian and international base metal companies prior to the terrorist attack. Since September 11th, various mining companies have been deferring capital projects. The attack has also had an impact on the willingness of businesses to take on additional risk. This event has added to the challenge of negotiating an acceptable agreement between us.

Mr. Hand has reaffirmed his company's commitment to the early development of Voisey's Bay and our negotiating teams are continuing to work towards a deal that is acceptable to both parties. 

This government is only prepared to negotiate a deal that is in the best interest of the people of this province. We believe that we will know whether an agreement is possible by year-end. However, we will take as long as necessary to ensure we get the right agreement - one that protects the province's interests.

It is also important for my honourable colleagues to understand the other agreements necessary for the project to proceed. 

Aside from negotiating a commercial agreement, there must be agreement on three other project components. These are equally critical to the overall success of the project. They include:

Impact and Benefits Agreements - These agreements will establish benefits regimes for aboriginal groups. They will address issues such as business opportunities, employment, training and financial compensation. These agreements are being negotiated separately by the Innu and Inuit with Inco.

Environmental Management Agreement - This agreement will establish an environmental management regime for the project and address the role the aboriginal groups will play in that regime. This agreement involves negotiations between the provincial and federal governments and the Inuit and Innu. 

The Voisey's Bay Chapter in the Inuit and Innu Land Claims Agreements deal specifically with aboriginal rights in the project area. These two agreements involve separate negotiations by the provincial and federal governments with the Inuit and Innu.

I am pleased to report that the respective parties have made progress on these agreements.

The development of the Voisey's Bay Project will provide many benefits to the people of Newfoundland and Labrador. Therefore, we intend to give these negotiations every opportunity for success. If we are able to conclude an agreement, I can assure this House that it will be a good deal for Newfoundland and Labrador.

Thank you.

2001 11 19                          2:55 p.m.