Voisey's Bay Regional Commentary:
Evening Telegram Business Section.
Smelter will add value, maximize benefits
2/2/98
For some weeks now Premier Brian Tobin has been very vocal in insisting that Inco honor its commitment to build the nickel smelter in Argentia as part of the Voisey's Bay agreement. It is a cause that all residents of the province should support.
It is not, and should not become partisan.
Before I continue any further let me put my bias out in the open. I was born and raised in Buchans, a base metal mining town in the central part of this province. The mines opened in 1927 and were very successful for American Smelting and Refining Company (ASRCO) until they petered out in the mid 1960s.
Since that time residents have struggled to maintain the community with some success but with tremendous effort. From my earliest days I can picture the rail cars of copper, lead and zinc concentrate being taken from the Buchans mine and shipped through Botwood for refining and industrial use in other parts of the world.
If that ore concentrate had been fully refined in Newfoundland rather than shipped in a "raw" state who knows what industry could have developed. Certainly it would have generated much more employment than ASRCO did over the years and there would have been a much broader economic base upon which to build a future once the ore supply had been depleted.
Now another multinational mining concern wants to remove the nickel ore from Voisey's Bay and ship it elsewhere for smelting and potentially expand industrial usage in other parts of the world.
For too long we have allowed resources to be removed without the benefit of doing the value added operations which are so vital to economic growth and the Premier is right in insisting that Inco honor its agreement. Inco's subsidiary, Voisey's Bay Nickel Company Limited acknowledges this agreement in it's Project Description Report of December 5, 1996 where it states on page 4, "The choice of a smelter and refinery location within Newfoundland and Labrador fulfills a commitment made by Inco to the province."
There is more than just the agreement which is at stake here. The smelter/refinery is scheduled to produce 270 million pounds of refined nickel annually by processing some 84,000 metric tons of concentrate.
The development of such a smelter will, of itself, create some 3,000 construction jobs. There are roads and parking to be built, buildings to be erected, water and waste treatment plants to be developed as well as a multitude of other requirements for an operation of this size. That activity alone will have an important impact on the economy of the province and will be followed up by more than 800 permanent jobs once the refinery is in operation.
The economic spinoffs from those jobs will enhance the economy of the
Southern Avalon as more employment in services will be required. While it is always difficult to project the full impact of such a development, economists tend to see a multiplier of approximately three to estimate the indirect benefits. This means that for every job created by the refinery another two jobs will be created in the community. In other words permanent employment could reach close to 2,500 jobs.
Unemployment levels in the area are in excess of 30 per cent and the refinery/smelter will become the cornerstone of economic recovery for the area. This reasonable use of the province's natural resources to create sustainable long term employment is not only desirable, it is essential.
The history of Newfoundland is full of examples of natural and primary
resources being used for the benefit of absent owners who have no interest or stake in the economic well being of this province.
It is encouraging to see the premier refuse to bend on the issue of adding value within the province to these primary resources. If Newfoundland had always insisted on valueadded development of its resources before they were shipped to world markets the economic base of the province would be much stronger. If that had happened the province would have been in a better position to offset negative impacts of cyclical economic downturns, even including the current fisheries moratorium.
Newfoundlanders are proud of their history. Now we need to look at that history and learn from it. There should never be another Bell Island, Buchans or other community forced to stand idly by as its resources are shipped out in the raw state.
Premier Tobin is right on this issue. He needs support.
Peter O'Brien is Vice President of the Atlantic Canadian Federation of Independent Business. |
