Minister responds to Opposition Leader�s allegations regarding the Lower Churchill

Mines and Energy Minister Lloyd Matthews today responded to comments made by the Leader of the Opposition, Danny Williams, regarding the development of the Lower Churchill river.

In an October 2 press release, Mr. Williams stated that an agreement on the development of the Lower Churchill river would pave the way for an expansion at Alcan�s aluminum refinery in Sept Isles, Quebec, and create thousands of jobs in that province using Lower Churchill power.

"Mr. Williams� comments are irresponsible and inaccurate," said Mr. Matthews. "The Official Opposition continues their fear-mongering tactics without any basis in fact and are frightened that this government will successfully conclude another major resource development deal that will provide substantial benefits to the people of this province."

"The fact of the matter is this: the expansion to this refinery would be completed in 2005, whereas Lower Churchill power would not be available until 2012. Also, the Quebec government committed the required power to run this operation well before formal negotiations on the Lower Churchill began. I do not understand how Mr. Williams can make a connection between the two projects."

The minister noted that Alcan officials have stated that the expansion to the Sept Isles facility had been planned since 1989 and that the company negotiated with Hydro Quebec to buy the electricity before a Lower Churchill development with the Province of Quebec was contemplated.

"The Quebec government has provided very cheap power to their aluminum customers," said the minister. "This province and Alcoa just recently completed a 12 month feasibility study that examined the possibility of providing low cost power to run an aluminum smelter. The conclusions of this study stated that without a $1 billion subsidy by the people of Newfoundland and Labrador, an aluminum smelter in this province was not feasible."

"This government believes that the Lower Churchill project can be developed on its own merit, without huge subsidies from our citizens. By selling the power to Quebec, this province will realize impressive benefits that will go directly into provincial coffers. We have always stated that any Lower Churchill development will have to provide significant benefits to our people, and we will not stray from that position."

Media Contact: Darrell Mercer, Communications, (709)729-5777

2002 10 03                                        5:10 p.m.