Loophole?

On September 30, 2002, the provincial government of then-Premier Roger Grimes made the Voisey’s Bay Development Agreement with INCO.

It provided that:

4.13.1 In consideration of the Government granting the Exemption Orders, the Proponent guarantees that it shall, prior to Cessation of Mining Operations, commence shipping into the Province Replacement Concentrate for processing into Finished Nickel Product at the Processing Plant. Such Replacement Concentrate shall be shipped to and processed by the Processing Plant in sufficient quantities to permit the Processing Plant to operate continuously at a rate that will produce not less than 25,000 tonnes of Finished Nickel Product annually and such shipments shall continue at least until such time as the contained nickel and cobalt in the Replacement Concentrate shall have equalled the total quantity of contained nickel and cobalt in the Nickel Concentrate shipped out of the Province under the terms of the Nickel Concentrate Exemption Order and otherwise than under the provisions of an Exemption Order.

4.13.3 The Proponent acknowledges that if it does not perform its contractual obligations…the Government may at any time subsequent to such breach commence an action against the Proponent for any one or more of the following remedies, whether claimed as primary or secondary alternative relief:

4.13.3.1 an order for specific performance;
4.13.3.2 appropriate injunctive relief, whether mandatory or prohibitory; and
4.13.3.3 monetary damages, including for consequential and economic loss, reflecting the substantial losses suffered by the Government and the economy of the Province as a result of such breach.

According to Danny Williams, section 4.13 of the Voisey’s Bay agreement is a “loophole”. A “giveaway”. Horrid stuff.

Today, the provincial government of Danny Williams announced a deal to continue its micro-management of the company formerly known as FPI.

A feature of the deal is said to be that:

"In addition to the immediate benefits that would be associated with this transaction, the deal also includes a series of conditions that will be triggered should either company fail to honour their commitments," said Minister Rideout. "These include financial compensation for the Provincial Government and the workers involved, as well as our government’s right-of-first-refusal, in the case of OCI, should that company attempt to sell various assets…"

Danny Williams is a Great Negotiator.™