No options left with Inco on Argentia: Williams

Newfoundland and Labrador Premier Danny Williams admits his government has run out of options in attempting to persuade Inco to build a nickel processing facility in Argentia, although it will still ask Inco to compensate the community for lost investments.

Inco decided months ago its preferred site for a plant to process nickel mined at Voisey's Bay would be Long Harbour, another community in Placentia Bay, in southern Newfoundland.

Williams said businesses in Argentia and the neighbouring town of Placentia invested millions after Inco picked the area for a hydrometallurgical processing facility in the 1990s.

"If I was a resident of Placentia or a businessperson in Placentia, and I had made expenditures on the basis that there would be this huge development in my community, then I would expect my government to protect me to the best of their ability," Williams said Thursday.

"And that's what we're trying to do."

Williams had wanted Inco to proceed with the facility which would use a novel water-based processing technology at Argentia, the site of an already contaminated former U.S. naval base.

The federal government decided this fall it would not agree to Williams's request to indemnify Inco on the Argentia site. The federal government assumed responsibility for the grounds after the U.S. government closed its base in 1994.

Running test facility

Inco is running a test facility in Argentia to determine whether hydrometallurgical technology will work on the ore mined at Voisey's Bay, in northern Labrador.

An agreement with a previous government allows Inco to export concentrate from Voisey's Bay while the company studies the processing technology.

If hydrometallurgical technology is found to be unsuitable, Inco saysit will build a conventional smelter in Newfoundland, and will import ore equivalent to what has been shipped from the mine, which went into production last year.

However, Williams said he has long believed that the development agreement with Inco, parent company of Voisey's Bay Nickel,does not actually guarantee that a processing facility will be built in the province.

"I've had the concern all along because of the weak agreement that's been signed here," Williams said.

Inco disputes that claim, and declined to comment on the possibility of compensation to the Argentia and Placentia area, althoughVoisey's Bay Nickel spokesman Bob Carter said the company is prepared to help market the Argentia site to other companies.

Carter said Inco will also work to make sure benefits flow from the facility to the entire area, and not just to Long Harbour, which is about 40 kilometres from Argentia.

Williams did not specify what sort of compensation he thinks is appropriate. He suggested investment in a community centre, tourism projects or a proposed school for the area.

"If the provincial government really wanted to do something for the Placentia-Argentia area, they would upgrade and pave the road to Long Harbour, to make it easier for people to commute and to make it easier for Inco to do business with the Argentia-Placentia area," Opposition Leader Gerry Reid said.