• Good afternoon ladies and gentlemen. It is a pleasure to be here. When negotiations resumed with Inco, I committed to providing timely updates to the people of the province on any progress that government is able to make during negotiations. My intention today is to provide an update on our discussions to date.
  
  
• As most of you are aware, the responsible development of the Voisey�s Bay Project represents one of the greatest economic challenges facing this government today. The challenge, simply put, is to achieve maximum benefits for the people of the province. Unless we can achieve this fundamental objective, the project simply will not proceed.
  
  
• In April, I had the opportunity to speak to you about the project. At that time, I discussed various aspects of the Voisey�s Bay development. This included the challenges that we face in our efforts to reach a commercial agreement, the possible configuration of a project, the necessary components of a deal, the need for resolution of outstanding aboriginal issues, and the overall benefits to the people of our province.
  
  
• Indirect benefits for employment and business opportunities as a result of the development of Voisey�s Bay are also important. During my April speech, I spoke:

TAbout companies increasing exploration expenditures throughout the province,

TAbout the province becoming a centre of excellence for the hydromet technology, and

TAbout the development of an experienced and skilled labour force for this sector.

These benefits will be part of any deal that may be reached.

• On Monday, June 18^th, government resumed talks with Inco. Both parties returned to the negotiating table because we had a shared interest in finding a way to develop the project � sooner rather than later. I can report to you today this remains the current position of both government and Inco.
  
  
• Ladies and gentlemen, I am pleased to report that overall the negotiations have been going very well. The working environment - which has included the necessary suspension of public comments by either party - has allowed for a frank and positive discussion of all relevant issues.
  
  
• Our negotiating teams continue to move forward with a view to finding common ground on all issues. We must balance the need of the province to realize maximum benefits for our shareholders, the people of the province, with the need of Inco to earn a fair return for its shareholders.
  
  
• Also, as part of the process of directing and assisting our respective negotiating teams and to ensure that we are moving forward appropriately on all of the relevant issues under discussion, Scott Hand, Deputy Chariman and CEO of Inco, and I have met regularly to further discuss issues that have arisen at the negotiating table and to provide leadership and direction to our respective teams.

• Over the past four months, our negotiating teams have met essentially on a weekly basis. 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 many points at issue. In fact, in reviewing the number of issues on the table at the outset, I can tell you that the vast majority have been resolved.
  
  
• That said, the few remaining issues are of fundamental importance to this province. The successful resolution, therefore, of these remaining points are key if we are to arrive at a commercial agreement. Until an agreement is reached on all issues, we do not have final agreement on any issue. As you know, we must arrive at one final agreement that is acceptable to both sides in order for this project to proceed.
  
  
• So, I am sure the real question foremost in all of your minds right now is: How long will it take government and Inco to conclude a negotiated deal? Well, as I said in April - and it still holds true - the most honest answer that I can give you is: It will take as long as it takes.
  
  
• The negotiations underway are complex and multi-faceted. By way of example, some of the items we have been discussing include:

TConcentrate movement; - that is to say if some concentrate needs to be exported while the mine/mill and processing facility is being developed, we would seek to ensure that over the life of the project an equivalent amount of concentrate will be processed in the province

TThe fiscal regime including mining and other applicable taxes;

TCertainty of processing in the province;

TIndustrial and employment benefits;

TResearch and development; and

TProject timelines.

• While this is by no means a conclusive list, it does provide you with an appreciation for the type of items at issue. As you can appreciate, each and every issue is singularly very important and complex.
  
  
• Those of you here today who are involved in the business community frequently participate in negotiations. As such, I know you understand when I say that I am not at liberty to publicly discuss the specifics of the ongoing negotiations because of the sensitive nature of the investment community given also that Inco is a publicly traded company.
  
  
• I can say to you, however, that:

TThe initial project will include an integrated mine and mill/concentrator processing plant at Voisey�s Bay along with supporting infrastructure such as roads, accommodations and port facilities at an estimated cost of $600 million;

TSubsequent developments will include underground exploration leading to the development of an underground mine and expansion of the concentrator. The estimated cost of these developments is an additional $750 million; and

TIt will also include a $200 million research and development program, part of which includes a demonstration hydromet facility at Argentia. Subsequent developments will see the construction of a $750 million commercial hydromet facility that will process Voisey�s Bay concentrate to a finished nickel product.

• Let�s put into context these basic but fundamental principals. Over our mining history the province has never achieved more than mining, milling and concentrating of our base metals. This project will set a new standard because for the first time we will see ore mined, milled, concentrated and processed into a finished product in this province.

• This government is prepared to negotiate a deal. However, we will take as long as is necessary, and so in terms of a timeframe, that could mean weeks, months or even longer. While we are all interested in getting it done as soon as possible, what really matters is that we do the right deal for the people of the province. We cannot negotiate an early deal unless it is the right deal.
  
  
• It is also important to put the ongoing negotiations between the Government of Newfoundland and Labrador and Inco into perspective.
  
  
• Aside from negotiating a commercial agreement, there must be agreement on three other project components. These are as equally critical to the overall success of the project, in terms of it moving forward, as is the commercial agreement. 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 Chapters 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 substantial progress on these agreements. Good work has been done on the agreements that require aboriginal participation on both the Land Claims and the Impact and Benefits Agreements.
  
  
• In recent weeks, the issue of the federal government�s possible participation by providing research and development funding has been publicly discussed. Inco has made an application for funding 
  under a federal program called the Technology Partnerships Canada or TPC.

• Research and development funding by its very nature is designed to help prove up new technology - as opposed to existing processes. In fact, the goal of the federal TPC program is to increase economic growth in Canada by investing strategically in research, development and innovation. Therefore, those whose suggest that Research and Development assistance should not be provided for work on unproven technology simply do not understand the fundamental basis of the program.
  
  
• As the Minister responsible for the Voisey�s Bay file, I have no problem with Inco�s application. In fact, I encourage all businesses that meet the requirements of this federal program to apply for funding. Consider this stark statistic for a moment. As of August 31, 2000, Newfoundland and Labrador businesses received only $1.1 million from this program which created approximately 40 jobs. In contrast, the federal government has awarded a total of $1.1 billion since the program�s inception creating approximately 23,000 jobs across Canada. We�ve received the lowest of any province in Canada.
  
  
• It is, of course, up to the private sector to make application for research and development funding. While the provincial government doesn�t decide on who applies - I can assure you that we fully encourage and support all potential applications.
  
  
• If Inco can move forward with its plan to process Voisey�s Bay concentrate using hydromet, then it would make Canada, and specifically Newfoundland and Labrador, a Centre of Excellence for this type of technology. Newfoundland and Labrador would have the only hydromet demonstration plant for nickel sulphide ore in the world.
  
  
• We are continuing to move towards a knowledge-based economy, therefore we must train our people to work and prosper under the new rules if we are to compete with the rest of the world. The proposed demonstration plant alone, if built, would train approximately 200 people in chemical and process engineering and metallurgy. That is a significant contribution to our labour force.
  
  
• Government acknowledges that there are external factors that will have varying impacts on the negotiations aside from the commercial components required for a project. Government and Inco are not working towards a commercial agreement in a vacuum.
  
  
• There is in fact much happening in the mining industry today. Canada has traditionally been viewed as a world leader in the mining industry, especially as it pertains to advances in technology. In recent years, however, the industry has been in decline and we must acknowledge these realities.
  
  
• On September 10^th, I participated in a Mines Ministers� Conference where the provincial, federal and territorial Mines Ministers� had an opportunity to listen to concerns from industry. Ministers were reminded through formal presentations by industry that the mining sector is facing several issues and challenges to its continued growth. These issues and challenges are of a national perspective and include onerous tax burdens, decline in exploration resulting in less opportunities for the development of new mining activities in Canada, and increased global competition. In this broader perspective, government believes the development of the Voisey�s Bay Project is of national importance. As a country we must show the mining community and the world that Canada is a good place to invest.
  
  
• Governments and industry are now faced with additional challenges. As the provincial, federal and territorial Ministers of Energy gathered on the morning of September 11^th, the unthinkable occurred. The terrorist attack on the United States affected millions of people around the world in a matter of hours. Here in Newfoundland and Labrador, thousands of bewildered travelers were stranded as the skies over North America were closed to commercial traffic.
  
  
• We are only now beginning to become more fully aware of the impact that September 11^th is having 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 11^th, it is reported that various mining companies are cutting exploration spending and deferring capital projects. The attack has also had an impact on the willingness of all businesses to take on additional risk. These are obviously issues that are being considered by major corporations in the context of probable large capital commitments.
  
  
• Last week, I met with Scott Hand to review our progress to date and to discuss the project in light of September 11^th. We discussed at length regarding our respective positions. During that meeting, Mr. Hand reconfirmed his company�s commitment to developing Voisey�s Bay. We determined, therefore, that the work should continue by all parties if Voisey�s Bay is to proceed. I was very encouraged to hear Mr. Hand reconfirm Inco�s commitment to the timely development of the Voisey�s Bay Project.
  
  
• So, you may be asking then where do we go from here?

TGovernment and Inco will continue to work towards resolving the few outstanding issues that need resolution for a commercial agreement;

TInco will work towards completing negotiations for Impact and Benefits Agreements with the Innu and Inuit; and

TThe Province will also work towards final agreements for the Voisey�s Bay Chapters of the aboriginal land claims.

TFinal aspects of the environmental management agreement will be negotiated.

• Before I conclude, it is important to remember that all of our potential resource development projects must be able to attract large sums of capital, if they are to proceed. Otherwise, our resources - no matter how valuable - will remain undeveloped. It is therefore essential to meet our interests and the interests of the proponents to ensure that our resources are developed. It goes without saying that our natural resources benefit no one if they remain undeveloped.
  
  
• The development of the Voisey�s Bay Project will provide many benefits to the people of Newfoundland and Labrador. Therefore, I intend to give these negotiations every opportunity for success. I realize the people of the province cannot be left hanging for an unlimited period of time in the hopes of a development, but we cannot rush the process to arrive at the wrong deal.
  
  
• For those of you in the business community and in the province in general, I can tell you that we are cautiously optimistic that we can reach a deal. If government is able to reach a satisfactory deal prior to the end of this year, then significant project related activity can occur as early as next year 2002.
  
  
• I hope this update has been helpful. I ask everybody to continue to be patient and allow these important negotiations to continue.

• I thank you for your time.