Nalcor building $22M transmission line to Labrador mining project

The provincial and federal governments announced new funding Friday for a project to provide hydroelectricity to a mining operationin western Labrador.

The province's Department of Natural Resources said Nalcor will build a new terminal station and a 27-kilometre transmission line from the Menihek Hydroelectric Generating Station's existing line to the Tata Steel processing site.

The transmission line will enable Tata Steel to reduce the mine's diesel consumption by up to 40 per cent.

It's a benefit to the economy and certainly good from a green perspective.- Lisa Dempster

Lisa Dempster, minister of municipal affairs and environment, says her department prioritized the project to reduce greenhouse gas emissions while encouraging resource development in Labrador.

"A new transmission line is being constructed to support the mining industry Tata in this case and it will offset reliance on diesel and contribute to a green economy," she said.

"This is positive news all the way around.It's positive [in] transitioning to green energy, we all know the impacts that climate change is having. We all have a role to play in this, so it's a benefit to the economy and certainly good from a green perspective."

'Enabler for mining projects'

Tayfun Eldem, president and CEO of Alderon Iron Ore, said the project is encouraging as his company works to develop the Kami mine project.

"The planned project not only supports the mining industry, it reduces the carbon footprint of the existing operations as well," said Eldem.

"Labrador's vast hydroelectricity supply is a tremendous enabler for mining projects and a perfect complement to its mining potential. We look forward to collaborating with both levels of government to implement similar initiatives."

Recovering costs from Tata

In a statement to CBC News, the Department of Natural Resources said the preliminary estimate for the project is approximately $22 million, with about $6.8 million provided by the federal government.

The department said Nalcor will recover the remaining costs through an agreement with Tata Steel.

When asked by CBCwhat guarantees are in place to recover the costs from Tata and how long it would take Nalcorprovided a statement that says the Crown corporation and the companywill complete a commercial agreement on cost recovery.

"If the terms and conditions of the commercial agreement are not acceptable, Nalcor will not undertake any work to construct the tie-in to its transmission line," reads the statement, which also says the two sides have reached an agreement in principle as part of the application for federal funding "and do not anticipate any such issues arising."

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