28 November 2013

Ministers confused about public money in stalled $100 million mine project #nlpoli

In addition to the $17 million in public cash announced in 2011, the provincial government has given an additional undisclosed amount of public money from several departments to a company trying to re- open a fluorspar mine on the Burin Peninsula.

Justice minister Darin King made that apparently unwitting disclosure in answer to questions in the House of Assembly from Liberal leader Dwight Ball.  King was answering a follow-up question from Ball on the $17 million.   He’d originally posed questions that fisheries minister Keith Hutchings answered.  Hutchings said the company had drawn down $300,000 of the public money.  When Ball asked King to clear up the obvious discrepancy,  King said emphatically:

I said zero of the $17 million has been drawn down because it is targeted toward the wharf project. There are other sources of funding from Natural Resources and other departments where the company has availed of to move the project forward. The $17 million was targeted specifically to that particular project. [Emphasis added]


There was no mention of additional money in the original announcement. Premier Kathy Dunderdale and King cut a ribbon and invited the media to a ceremony as part of the Conservative’s 2011 pre-election campaign spending spree.  The announcement looked like such a big deal that Canadian Press actually said the mine had re-opened. 

In fact, the provincial government concluded an agreement with Canadian Fluorspar in 2012.   In May, 2013 Canadian Fluorspar executive chairman Richard Carl wrote a letter to the editor of the province’s largest circulation daily to caution against the optimism in an earlier Telegram story. 

In the letter, Carl noted a problem with increasing costs that had caused the company to conduct a year-long review that wrapped up in early 2013.  In other words, the company had either started the review or were about to start the review when it signed the government agreement in 2012. Work on the project still hasn’t started.

Justice minister King told the House that the government received regular updates from the company on the project and that he had met with company representatives within the past seven days.

The confusion between Hutchings and King doesn’t clear up another problem with Hutchings’ comments.  He mentioned the government had turned over $300,000.  But in budget committee hearings last spring, members of the committee were told by department officials that the company had already received $639,000.

Hutchings – who was innovation minister at the time – also told the House on May 14 that the provincial government “committed to the actual infrastructure of the wharf as part of the $600,000. It is engineering design to get the project started, to get tenders out.”

Not only is Hutchings saying something different six months later than what he said before but Hutchings’ comments in May contradict King’s comments in November.  King insisted that the $17 million was for the wharf project  and none of that had been spent to date.  The $300,000 was for something else.  But Hutchings’ comments in May clearly link twice as much public cash directly to the wharf project.