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Kami benefits agreement raises the bar for future mining development in Newfoundland and Labrador

From the Department of Natural Resources, May 27, 2014

Today, the Honourable Tom Marshall, Premier of Newfoundland and Labrador, announced the completion of the benefits agreement for the Kami Iron Ore Project in western Labrador.

“The benefits agreement for the Kami Iron Ore Project is great news for Labrador and raises the bar for operators looking to do business in the province. Remaining true to this government’s longstanding commitment to ensure natural resource development is maximized for the people of the province, ‎we have set high standards to ensure industrial and employment benefits accrue directly to Labradorians and Newfoundlanders. I’m looking forward to visiting Labrador West again very soon to meet with people in the region who will benefit directly from this agreement.”
– The Honourable Tom Marshall, Premier of Newfoundland and Labrador

The Kami Iron Ore Project is owned by Alderon (75 per cent) and Hebei Iron and Steel Group Company Limited (25 per cent) through the Kami Mine Limited Partnership. The first phase of the project will produce eight million tonnes of concentrate annually and has the potential to expand to 16 million tonnes. Mining and surface leases are also being finalized today, and construction is expected to begin this summer.

“This agreement secures significant long-term economic benefits for the people of Newfoundland and Labrador from the Kami Project. We continue to receive strong support from the Provincial Government and we look forward to developing our Kami Project within the framework established by this agreement.”
– Tayfun Eldem, President and CEO, Alderon

Residents of Newfoundland and Labrador will be provided first consideration for employment during all phases of the project. A Labrador first hiring priority protocol has been established and these commitments must be taken into account in any collective agreements and apply to all contractors and sub-contractors.

“The Kami Iron Ore Project will bring many opportunities to Newfoundlanders and Labradorians. The project will create direct employment for 800 workers at the peak of construction and at least 400 during the operations phase. In addition, the project will contribute at least $18 billion to provincial GDP and $2.6 billion in taxes and royalties to the Provincial Government over its anticipated 30-year life. We look forward to the start of the project in Labrador over the coming months.”
– The Honourable Derrick Dalley, Minister of Natural Resources

Suppliers in the province will be provided full and fair opportunity and first consideration for procurement opportunities during all phases of the project, reinforced through the establishment of a Labrador-first procurement priority protocol. Kami LP and its Engineering Procurement Construction Management contractor will maximize the use of provincial suppliers, on a competitive basis.

“Labrador West has a well-established mining industry that has brought considerable economic activity to the region for many years. This project positions the region for continued growth over the long-term and will bring economic and other benefits to businesses, residents, and the region as a whole.”
– The Honourable Nick McGrath, Minister Responsible for Labrador and Aboriginal Affairs

For the first time in this province, the benefits agreement features firm commitments to hire a minimum number of apprentices for all phases of the project. The partnership commits to a minimum of 15 per cent of the skilled trades workforce to be apprentices for the construction phase of the project, and a minimum of 25 per cent of the skilled trades workforce to be apprentices during the operations phase. Further details on benefits related to apprenticeship can be found in the Backgrounder – Kami Iron Ore Project Supports Employment, Training and Research.

The Provincial Government continues to be a leader in gender equity and diversity planning, as evidenced in the plan with Kami LP. Qualified women, persons with disabilities, Aboriginal persons and visible minorities will have equitable access to the many employment and business opportunities associated with the project. One such initiative includes the provision of an employee childcare centre.

QUICK FACTS

  • The Provincial Government and the Kami Mine Limited Partnership have announced a benefits agreement to advance the Kami Iron Ore Project in western Labrador.
  • The benefits agreement establishes a process to ensure priority for Newfoundland and Labrador participation in the project including hiring and procurement opportunities.
  • For the first time in this province, the benefits agreement features firm commitments to hire a minimum number of apprentices for all phases of the project.
  • The agreement also includes a commitment from Kami LP to fully implement and abide by its Gender Equity and Diversity Plan.
  • The agreement will be posted online in the coming days.

MORE INFORMATION

More background information can be found 00here.

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