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Tuesday, January 29, 2008

Who Do You Believe?

The history: Ever since the idea of developing the Lower Churchill hydro project came to the fore I've been a big supporter of utilizing as much of the power as possible to attract local industry to Labrador.

Through multiple correspondence, between November 2006 and March 2007, with Newfoundland and Labrador's Minister of Natural Resources, Kathy Dunderdale, it was made abundently clear to your's truly that attracting industry (precisely building a smelter) in Labrador was not in the cards due to the costs involved.

Over the past few months Premier Danny Williams has publicly stated on several occassions that the building of a smelter in Labrador is indeed one of the key uses he sees for Lower Churchill power.

The Present:

On January 2nd of this year I took it upon myself to write the Premier about this apparent disconnect between his direction and the information I had been given by his minister. I followed up that correspondence again on January 22nd. To date there has been no response to my concerns.

What follows is a copy of my January 2nd letter. If anyone would like to "suggest" to the Premier that perhaps he should respsond to these questions I encourage you to do so. His email address is:

premier@gov.nl.ca


January 2, 2008

To: Premier Williams

From: Myles Higgins

Dear Premier. Williams:

I am writing to ask your office for clarification of the statements you have recently made to various forms of media which appear to be in direct conflict with those made previously by your cabinet representative, Ms. Kathy Dunderale.

Recently you have made it very clear that one of the mega-projects you hope to see come to fruition is the development of a smelter in Labrador that would make use of Lower Churchill power and create much needed jobs in the area. I congratulate you for investigating this approach to utilization of the Lower Churchill as I have long been a proponent of using that power to attract industry to the region rather than for export alone.

My concern lies in the fact that when I approached Minister Dunderdale in November of 2006 on behalf of the Newfoundland and Labrador Defense League (NLDL.org) to ask her why your government did not appear to be very proactive in pursuing a smelter for the region she responded to me that a study, conducted by ALCOA, had shown that, “…it was not a viable option and in fact required almost $1 billion of Government financial assistance.” (Please see attached letter “Dunderdale_Nov_2006.doc)

When questioned about the details of these costs Ms. Dunderdale said she could not go into the details of the study but reiterated that a smelter in Labrador , using Lower Churchill power, would cost ALCOA $1 billion more than other alternatives. (Please see attached letter “Higgins.pdf which was sent to me by Judy Beckwith on behalf of Minister Dunderdale in March of 2007)

My concern does not lay with the government’s intention to attract industrial development to Labrador , in fact I applaud the move. My concern lies instead with the apparent conflict in message between your office and that of your Minister. I am also concerned over which message is the correct one and as I expressed to Ms. Dunderdale at the time, my concern is also what the province might be lacking that would require an expenditure of $1 billion dollars in order to make Lower Churchill spin off development competitive with other options available to large organizations like ALCOA.

Your latest comments on the development of a smelter in the region have once again raised my concerns and additionally, I wonder why this massive expenditure no longer appears to be a factor. Has the cost simply disappeared for some reason, are we to expect that if a smelter is developed it will cost the provincial government a massive expenditure to make it happen, or is there really a drive underway to build a smelter at all or is this simply political posturing of some kind? I sincerely hope the latter is not the case.

Sincerely,
Myles Higgins

11 comments:

Anonymous said...

Looks like Danny is using the prospect of a smelter and jobs to quiet the people of Labrador about not getting any benefit and all the environmenta fallout of this development.

Come on Danny, aren't we a part of the province? Don't we deserve the truth?

Anonymous said...

Oh Ye of little faith .Have I not taken the pain of hunger from your belly's and placed your feet upon the path of righteousness .

Some of you do not need a Premier. You need faith in yourselve's and the belief that better times are ahead.

Ya ,Ya ,I know what your going to write .But ,it's a hell of alot better then any Premeir has done since Confederation.We can't blame everything on William's.He's at least trying to get the provice somewere.Not like most.

PS, Don't shoot the messeneger.:)

Very well done Myles.

time for a change said...

Hey Myles - why not post the letter as an attachment so we can see them. Thanks,
TFAC

no-man said...

I think you should post the full response from Dunderdale. "Let the people know the truth and the country is safe" Danny is fond of saying.

NL-ExPatriate said...

I don't believe the initial report that told the NL govt that it wouldn't be feasible to put a smelter in Labrador.

Patriot said...

No-Man requested a copy of the letter from Ms. Dunderdale be posted here.

I don't have a problem with that but the letter itself is a bit long and often tedious, repetitive, etc. The following is a paragraph from that letter that sums up the spirit and content.

Here is the paragraph I refer to in my column:

"Consideration has, and will continue to be given to industrial development opportunities as they arise. In 2002, a study was completed with Alcoa on the feasibility of locating an aluminium smelter in the province to be powered from the Lower Churchill. At that time, it was concluded that it was not a viable option and in fact required almost $1 billion of Government financial assistance. To attract industrial customers, the Province must compete globally with low cost energy supplies, low cost labour and other competitive advantages."

Anonymous said...

Long and tedious?

I'm suspicious.

Why won't you post the letter?

Patriot said...

Hey, you want the letter here it is. I would'nt want to build a mystery in your mind where none should exist. Enjoy:


November 28, 2006





The Newfoundland and Labrador Defense League
nldl_nl@yahoo.ca

Dear Sir:

I am writing in response to your suggestion regarding commissioning an independent cost/benefit analysis of options for the use of Lower Churchill Power in the province.

The Government of Newfoundland and Labrador has taken a new approach toward development of the Lower Churchill resource. This approach was adopted with the primary objective of maximizing benefits for the Province.

To achieve this objective, in 2005 an international request for expressions of interest and proposals was launched in order to identify all possible development options for the Lower Churchill resource. Following an assessment of the responses to this request, in May of this year it was announced that Newfoundland and Labrador Hydro (NLH) would lead development of the resource. NLH has now developed a comprehensive planning and decision process to execute the development. This work includes assessment of market opportunities, including provincial requirements, and market access. Ensuring availability of electricity to meet our provincial requirements over the long term, including potential industrial customer requirements, is a priority.

Consideration has, and will continue to be given to industrial development opportunities as they arise. In 2002, a study was completed with Alcoa on the feasibility of locating an aluminium smelter in the province to be powered from the Lower Churchill. At that time, it was concluded that it was not a viable option and in fact required almost $1 billion of Government financial assistance. To attract industrial customers, the Province must compete globally with low cost energy supplies, low cost labour and other competitive advantages.






The Government agrees that as industrial opportunities arise, the forecast overall economic impacts of industrial operations powered from the Lower Churchill have to be analyzed in the context of the economic and financial viability of the hydro development itself, also taking into consideration forecast profits to be generated from exports. This analysis will be carried out by Government and NLH. We will continue to assess all market opportunities to achieve the objective of maximizing benefits for the people of the province.

Sincerely yours,



KATHY DUNDERDALE, MHA
Minister

c. Premier’s Office

Anonymous said...

What did you edit out?

Patriot said...

Anon 10:08 wrote: "what did you edit out". That's not event worth a response so that's the only one you'll get. If you don't believe me about what was said contact Minister Dunderdale or Premier Williams andsk them about what was said by each of them. I'd appreciate learning what you find out because that's exactly what I'm trying to do, get answers.

Go for it if you don't believe me.

Anonymous said...

The following appeared in Mining weekly


Vale may build aluminium smelter in Colombia
By: Liezel Hill
Published: 31 Jan 08 - 23:58
Brazilian mining, energy and logistics group Campanhia Vale do Rio Doce (Vale) has studied power generation projects in Colombia to potentially supply energy to an aluminium smelter, but has not made any decisions regarding investment in the country.

Senior management had also not yet analysed any of these options, the group said on Thursday.

The company is looking for opportunities to exploit its reserves of bauxite, used to make aluminium, but needs to find a source of low-cost energy before it chooses a location for an aluminium smelter, Vale said in a statement on its website.

“As one of the largest producers of coal in the world, Colombia has been indicating its interest in attracting investments to its coal business,” the firm said.

On the other hand, Vale became a coal producer with the acquisition of Australian operations in 2007, and it plans to develop the Moatize project in Mozambique.

It is also performing a feasibility study on the Belvedere coal deposit in Australia and is building a coal-fired thermal plant in Barcarena, Brazil.

"As usual, these investment options will be duly analysed by the company’s management," the firm said.

Vale is increasingly diversifying beyond its primary iron-ore and nickel businesses.

CEO Roger Agnelli said last year that he wanted the Brazilian group to overtake the world's biggest miner, BHP Billiton.