Signed benefits agreement provides for local hires, child-care spaces
Pen has been put to paper on an agreement stipulating direct benefits to be seen by Newfoundlanders and Labradorians with the start-up of a new mine in Labrador West.
Premier Tom Marshall (centre) prepares to sign a benefits agreement, alongside Natural Resources Minister Derrick Dalley (left) and Alderon president and CEO Tayfun Eldem. — Photo by Ashley Fitzpatrick
The Kami iron ore mine is being developed under a partnership of Alderon Iron Ore and China’s Hebei Iron and Steel. It is expected to contribute $18 billion to the provincial GDP during a 30-year life, providing the province $2.6 billion in taxes and royalties.
The new benefits agreement looks beyond royalty and taxation numbers, addressing topics including hiring and procurement practices and how the development can help expand the local skilled trades workforce.
A signing ceremony was held Tuesday morning at Confederation Building in St. John’s.
The standing deal includes requirements for local-first hiring, the provision of a 40-space child-care centre in Labrador West and a $7-million education and training fund to be provided as the mine goes into production.
There are also landmark requirements for skilled trades apprentices, with the company stating a minimum of 15 per cent of the workforce during construction, reaching 800 at peak, will be at the apprentice level.
The post-construction workforce will be made up of 25 per cent apprentices, out of a total workforce of about 400 people.
“The apprenticeship piece is important here, because we have a college here that’s put out people in various trades and it’s important they have an opportunity to get their career started,” Wabush Mayor Colin Vardy said after details emerged.
Wabush was hit hard in February with the idling of Cliffs Natural Resources’ Scully Mine, leaving the prospect of Alderon’s new Kami mine as a light on the horizon.
In addition to job opportunities, Vardy said, the town has a special tax agreement with the Kami partnership, for a grant in lieu of taxes and town permits. He would not say how much the new mine would be worth to the town.
The leader of the region’s other major municipality, Labrador City Mayor Karen Oldford, was not reached as of press time.
“As an organization that works with women, we are pleased to see the province is continuing to be a leader in gender equity and diversity plans and we applaud the strides taken to see that women are represented fairly,” said Karen Walsh, executive director of the Office to Advance Women Apprentices.
She applauded the planned hiring for apprentices.
“It’s a sign that not only governments, but also the unions and the industry are taking it seriously, that in order to move our provincial tradespeople forward they have to consider apprenticeship (time) as a big part of that puzzle,” she said.
“One of the things we’ve heard a lot from are apprentices looking for placement. ... I’m certain this is a major step in helping deal with that,” said Premier Tom Marshall, taking questions after the signing, alongside Natural Resources Minister Derrick Dalley and Alderon president and CEO Tayfun Eldem.
For Alderon’s part, “we recognize that the time that’s invested in developing apprentices early on, i.e. with the start of construction, ultimately helps us in the future by developing future journeypersons who can then take on roles within our company,” Eldem said.
“Labrador West has a well-established mining industry that has brought considerable economic activity to the region for many years,” added Dalley, addressing the House of Assembly after the news conference.
“This project positions the region for continued growth over the long term and will bring economic and other benefits to businesses, residents, and the region as a whole.”
Both Liberal Leader Dwight Ball and NDP Leader Lorraine Michael did not take issue with the benefits agreement at the time of the announcement. They said they had questions, but both applauded the provisions for hiring apprentices. The start-up of the Kami mine did require the province to commit to seeing a new power line built from Churchill Falls to Labrador West.
And the mine is still dependent on the companies involved being able to lock in $1.5 billion in financing.
Eldem said whether or not the project will proceed as planned will be known by the end of September.
KAMI BENEFITS AGREEMENT HIGHLIGHTS
— Full and fair opportunity on employment and procurement contracts for local companies and residents.
— Qualified Labradorians hired first, then qualified Newfoundlanders, before workers from outside the province.
— Fly-in, fly-out operations allowed in construction, but mine will be required to have 100 per cent N.L. workforce within two years of full production.
— A signed gender equity and diversity plan, with specific employment targets, will have to be followed.
— Yearly, monthly and quarterly reports will be submitted to the province to track the company’s compliance with standing agreements.
— In addition to a main project office, the mine’s engineering, procurement and construction management (EPCM) contractor will have to establish an office in Newfoundland and Labrador.
— At least 50 per cent of hours on detailed engineering and design work for the construction will have to be completed in-province.
— A $7 million education and training fund will be supplied. A committee with representatives from the mining partnership and the province will oversee its use.
— A 40-space childcare centre will be provided, with $50,000 for a third party to start up the operation.
Source: News release, Government of Newfoundland and Labrador, May 27, 2014.