March 11, 2002
(Mines and Energy)

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

Major Projects Update

I rise today to provide Honourable members with an update on three major resource projects, Voisey’s Bay, the Lower Churchill and White Rose.

Voisey’s Bay

As I stated in my last Voisey’s Bay update to the House on November 19, the majority of issues under discussion have been resolved. At that time, three or four fundamental issues remained outstanding and needed further negotiation. While not all of these issues have yet been fully resolved, good progress has been made on various aspects of each issue.

Negotiations have continued over the past number of months. Scott Hand, Deputy Chairman and CEO of Inco, and I continue to discuss the remaining outstanding issues which must be successfully concluded before a commercial arrangement can be signed.

The province’s fundamental position on the remaining outstanding issues has been clearly articulated to Inco. A guarantee of a processing facility in the province, full processing to a finished nickel product in the province, a guarantee that the amount of concentrate that may leave the province in the early years of a project will be returned to the province for processing, and acceptable development timelines, are required elements of any acceptable deal on Voisey’s Bay.

Government remains committed to negotiating a Voisey’s Bay deal that will provide substantial benefits for the people of Newfoundland and Labrador. This is our mandate from the people of the province.

We will remain at the negotiating table until we reach a deal which satisfies the province’s fundamental demands, or until we are certain that no deal can be reached.

Lower Churchill

Development of the Lower Churchill River has presented significant challenges over the past 30 years. Distance to market, ensuring adequate transmission capacity and securing a long-term customer has always been a challenge. Recently, government has been reviewing numerous options promoting the development of this resource.

In July, a preliminary feasibility review was undertaken with Alcoa regarding the viability of developing the Lower Churchill and establishing aluminum processing facilities in the province.

In December, Alcoa presented their findings to government and Newfoundland and Labrador Hydro. A number of significant issues were identified, including transmission, ownership of the hydro facility, and royalties, just to name a few. Since that time there have been ongoing discussions. I have recently had an opportunity to meet with senior Alcoa officials in New York and Montreal. Alcoa continues to express interest in the potential development. However, we as a government are not yet certain whether there is a sound basis upon which to proceed forward with Alcoa. We are continuing to explore this option. We have not extended the Letter of Intent with Alcoa , however, we are honouring the provisions of that agreement until such time as our discussions are concluded.

In the meantime, the lines of communication also remain open with Quebec. Premiers Grimes and Landry have briefly discussed the project and government officials are having some preliminary discussions surrounding the Lower Churchill potential.

I am optimistic that in the coming weeks, as these discussions progress, we will be in a position to decide on the future direction of the project. I will provide an update to the House at that time.

White Rose

In December of last year, both the federal and provincial governments approved the White Rose Development Plan Application. This approval now permits the proponents, Husky and Petro-Canada, to move forward with the development of the White Rose field. Government worked closely with the proponents to ensure a significant level of benefits will accrue to the people of Newfoundland and Labrador.

Government expects to hear from the White Rose proponents in the near future. We are optimistic that a decision will be announced soon and remain hopeful that the proponents will move forward with this project.

2002 03 11                          2:10 p.m.

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