So, what have we learned about Labrador mining and Alderon Iron Ore’s Kami project after The Telegram interviewed president and CEO Tayfun Eldem?
Well, we’ve learned that the company feels it is poised to be the next major iron ore company in the nation. That it has put forward a proposal to Nalcor for the supply of power. We’ve learned that Nalcor has a complicated three-stage proposal system for assessing requests for power.
And we’ve learned that the energy company is moving ahead quickly with a project that Natural Resources Minister Jerome Kennedy has said depends on Muskrat Falls as a new source of power.
Here’s Eldem: “What (Nalcor is) doing right now is they’re trying to assess: is the power available — in terms of energy — which I think that they’re confident that they can supply the energy. And the second piece is: does the transmission infrastructure need any upgrades?
“They now have a very clear idea of what it’s going to take for them to bring power to our site … They’re moving into Stage 3, which then looks at what aspects they need to look at in terms of technical permitting, engagement and they’re about to start that process. At the end of that, then we’re going to go into a power purchase agreement with Nalcor.”
The company expects environmental concerns to be fully addressed by the fall of 2013. The company wants to be in full production by the end of 2015 — a time when, even if project sanction for Muskrat Falls comes tomorrow, the Muskrat Falls project would still be a considerable time from completion.
Still, all engines ahead, full speed.
Missing, of course, is a crucial little piece of commercially sensitive — and politically sensitive — information. As Alderon finishes up its full feasibility work, it has a pretty good idea about what it will cost to mine the Kami ore and process that ore for shipment. It has a pretty reasonable idea about where it expects iron ore prices to be on the world market — but most of all, it has a pretty good idea about what it expects to be paying for electrical power. That price is crucial to the mine’s success — and no one is saying anything about what it might be.
Alderon will apparently be making its power purchase agreement with Nalcor, which means the deal will be struck under the auspices of the most restrictive access to information rules in place in the province — rules that specifically state Nalcor’s boss will “refuse to disclose to an applicant under that Act commercially sensitive information of a third party.” Nalcor is also not a regulated utility, meaning the Public Utilities Board would not be able to review the power purchase deal.
We’ve heard a lot about Muskrat Falls, and about the way the provincial government thinks it has released more information about the project than ever.
Here’s the point: will the government commit to release, in full, all power purchase agreements signed for Muskrat Falls?
Or, behind closed doors, will ordinary rate payers have one deal, and big businesses — businesses harvesting this province’s publicly owned, non-renewable resources — have something different and special?
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Wince, do not give John too much credit his knowledge appears to go only as far as any of Dunderdale's minsters and back bencher mouth piecies which are often used to rebut legitimate questions. (a little knowledge is dangerous and keeps us all ignorant) John make a blanket statement that all industrial rates in Canada are subsidized, which is just not true. However, deals to subsidze power costs do exist as they do for labour and generally I believe these provide little long term benefit to the well ebing of the economy and should be discouraged. As to a mining interest moving shop as the outcome, big woops there John! Magenite of the quantity and quality that is found in Lab West are rare, deposits in Mininesota, Michigan, Brazil and Australia, all of which are competitive have cost elements including power costs that are not strictly comparable and as such may still be less competitive than Lab West even with higher power costs. Also, the planned mine dvelopment will ship esentially a mostly unprocessed ore to China which does beg the question why build a hydo generator which will result in a average cost of 7.5 cents per kilowatt hour (at the hydro station) and sell that power to a mine at 4 cents. Is the value of the investment to that accrues to the Province worth this level of subsidy? John?