Government releases correspondence to Voisey�s Bay

Natural Resources Minister Ed Byrne released today the letter he forwarded to Voisey�s Bay Nickel Company Ltd. (VBNC) in response to the information the company provided to government on November 30, 2005, to support the company�s decision not to build the commercial hydromet plant in Argentia.

Minister Byrne said that once government received notification from VBNC of its proposed decision, along with supporting documents, government officials and an independent consultant carried out a due diligence analysis of the information. The minister stated that the letter he released today, dated December 14, 2005, clearly indicates that, following the analysis, government was not satisfied with the information VBNC provided to support its decision to find a location other than Argentia for the hydromet plant.

"There remained many questions that we wanted answered before we could accept the decision of VBNC," said Minister Byrne. "We were of the view that VBNC had not provided government with enough information that would allow the company to select another location based on the commitment outlined in the development agreement."

Section 4.6.4 of the Development Agreement between the Government of Newfoundland and Labrador and VBNC states, "The Proponent shall establish the Processing Plant at Argentia unless environmental conditions at Argentia would make it not economically feasible to establish the Processing Plant at Argentia, and in such circumstances, the Proponent shall locate the Processing Plant at another site in the Province."

"As you can see from the amount of additional information I requested of VBNC, it is our view the company failed to live up to that section of the agreement," said Minister Byrne. "The company could not start the process of looking for another site until our government was convinced that locating the plant at Argentia was neither economically nor environmentally feasible."

The minister noted that government has yet to receive the additional information from VBNC.

Furthermore, Minister Byrne said he strongly suggested in the letter that VBNC advise the public that it was proposing not to locate the plant at Argentia since this government was prohibited from doing so due to the agreement signed by the previous administration.

"We firmly believed that because of the impact of this potential decision on the people of the region, their communities and indeed the entire province, VBNC had an obligation to publicly disclose its intention," said Minister Byrne. "Despite the seriousness of this pending decision and despite the fact that VBNC prides itself on building good relationships with communities, it refused to release the information at that time."

Copies of the Development Agreement between the Government of Newfoundland and Labrador can be accessed at: www.nr.gov.nl.ca/voiseys/pdf/legal.pdf

View letter to Voisey�s Bay Nickel Company Limited (PDF)

Media contact: Carmel Turpin, Communications, (709) 729-5282, (709) 6850-4624, carmelturpin@gov.nl.ca

2006 01 24        4:10 p.m.