Power line needed now for Lab West industry, say mayors

Ashley Fitzpatrick
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Want announcement in the coming weeks that new hydro line is a go

Town council members in Labrador West have said it in interviews, written it in letters to the provincial government and, today, held a news conference to make the point again: it’s time to build a new hydro line for the area.

Labrador City Mayor Karen Oldford and Wabush Mayor Colin Vardy led the charge at the event held shortly before 11 a.m. today, pressing for an announcement of a new transmission line.

They want that announcement  made within the next couple of weeks, they said, so as not to delay or kill new iron ore mines and mine expansions currently in the planning and regulatory review stages.

“It’s a critical time for our region,” Oldford said, adding that the towns believe Alderon Iron Ore’s Kami mine project is at risk without a new hydro line, to feed the project power.

“Our understanding is that if this line is delayed, even by another few months, this whole project may be in jeopardy,” she said, adding construction of the line can take over 25 months.

Alderon’s mine holds the promise of hundreds of full-time jobs for the region, in addition to industrial and business growth.

Nalcor Energy and its subsidiary, Newfoundland and Labrador Hydro, have consistently said new infrastructure will come as it is needed. In the case of new mines, the infrastructure will only be built with signed contracts related to the purchase of power and a guarantee the lines will be used.

Neither mayor could say such an agreement had yet been made with Alderon.

“What you have to remember is the people who are financing this development will not release any financing until they can prove they have the proper infrastructure in place to have a working mine,” said Vardy.

“A requirement of their financing is to have a power agreement in place. So that’s the missing piece of the puzzle at this point.”

Premier Kathy Dunderdale made statements to VOCM earlier this week in support of the line’s construction, but offered no firm deadline as to when it might move ahead.

The Alderon project has yet to be released from environmental assessment by the province, though the company reported in October it had no further work to be completed for the assessment and the project was being put to the minister and cabinet for final decision and direction.


More than Alderon project at stake

Meanwhile, the town mayors also referenced a report by Memorial University of Newfoundland economist Wade Locke, looking at the potential that lies in mining industry growth.

That growth would include projects like Kami, but also prospects like the government-held Julienne Lake and expansion proposed by the Iron Ore Company of Canada.

“Based on the results of the Wade Locke report, Labrador West has been recognized as a provincial growth centre,” Oldford said, adding certainty is needed on the projects for the long-term planning of the region’s municipalities.

The message this morning was akin to what Oldford said in an interview with TC Media earlier this month.

“The provincial coffers could easily be utilized (regarding the transmission line) with further industry developing here,” she said at that time.

The towns had already written to Natural Resources Minister Derrick Dalley to express support for building the transmission line, following up the letter with a visit to the minister in St. John’s about 10 days later.

Similar to the pressure from the towns, Labrador MP Yvonne Jones held a press conference in St. John’s in November in order to draw attention to the issue.

“We know how volatile the mining industry is. We know that it’s very difficult to raise capital for investments. And we want to ensure that these companies have the infrastructure they need to be able to move forward immediately,” she said.

As part of Lower Churchill project work, Nalcor Energy announced Wednesday that a contract to provide new transmission lines between Muskrat Falls and Churchill Falls has been awarded to Valard Construction, out of Alberta.

That work is expected to begin soon and be completed in early 2016. It will include the assembly of towers and installation into tower foundations, in addition to actually running the line.

Those pressuring the government for construction in Labrador West say an announcement for that area would be a welcome followup.

Organizations: Lab West, Nalcor Energy, Newfoundland and Labrador Hydro University of Newfoundland Iron Ore Company of Canada

Geographic location: Labrador, Wabush, Alderon Iron Ore Labrador West

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Recent comments

  • Dolf
    December 19, 2013 - 14:43

    I had it figured from the start the Alderon project was the driving force behind Muskrat Falls and cheap power rates for Alderon. All that was needed was Bill 29 and Nalcor to close the deal. We'll see how it pans out.

  • Robert
    December 19, 2013 - 14:38

    Agree 100%! Get on with it! Sounds like we may have our own Ft. McMurray on our hands! Where in the world will they live; please don't tell me 'more construction'.

  • Jon Smith
    December 19, 2013 - 12:30

    Yes, let's extend the make work project at Muskrat into Lab west to subsidize the mining companies. If we can subsidize Nova Scotia power rates we can also subsidize these companies. Last we heard though, the people of Lab west and the whole of Labrador don't want to pay there fair share of the power bill. Why should only the island residents pay these subsidies?????

    • Koldford
      December 19, 2013 - 18:00

      Jon Smith the Mining industry in Labrador West injects hundreds of millions of dollars yearly into the provincial treasury and has been doing so for 50 plus years. The Wade Locke Report, a recent study commissioned by the provincial government quantifies global opportunity within the iron ore industry driven primarily by the Chinese markets. The Report concludes the mining industry in Labrador West has the potential to generate 2 – 4 billion dollars in revenue and increase provincial GDP by more than 40 billion over the life of a 25 year mine.