Government Accountable for $1B+ Giveaway to the Iron Ore Mining Sector (Update)

 PlanetNL34 Addendum: Additional Information On Labrador Industrial Rate Policy

On the same day as PlanetNL34 was posted on the Uncle Gnarley blog, some pertinent information was discovered while researching for future postings.  The query into Government inaction on the Labrador Industrial Rates Policy (LIRP) is no longer a mystery: It was indeed implemented. 

An evidentiary trail of breadcrumbs led to finally finding the LIRP revenue stream in an unexpected place.  This means some key errors were made in PlanetNL34 that will be corrected and clarified here.  At the same time, Government is by no means absolved as they substantially failed to capitalize on the opportunity, and they appear to have committed to the deed until 2041.

TIME FOR IRON ORE MINING SECTOR TO PAY FAIR MARKET ELECTRICITY RATES

Guest Post by PlanetNL

PlanetNL34: Labrador Industrial Rate Policy Overdue for Revision

(With Update - June 8, 2021)

The price paid for electricity by the Iron Ore Company of Canada (IOC) in Labrador City and Tacora Resources, the new operator of the Scully Mine in Wabush, is very low.  It is shockingly low.  

According to a footnote found in the 2017 General Rate Application submitted to the Public Utilities Board (PUB) by NL Hydro, the blended cost for the Labrador Industrial Rate that is specific to only the Labrador West iron ore mines was a miniscule 0.315 c/KWh.

The mining companies are getting record high iron ore prices these days and sending their profits not just out of province but out of country.  Providing them electricity at giveaway pricing is a practice that needs to end right away.  They can easily pay a fair price for electricity and would still make enormous profit.

The Provincial Government, despite their talk of desperate need for rate mitigation, is apparently happy to let the giveaways continue.  This post shows the opportunity cost of Government’s blatant negligence.