Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.

Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Monday, June 25, 2012

Masters in Our own House

2012 marks uncharted territory for the province of Newfoundland and Labrador. Unlike years before, the province is facing the crushing realities of the world market place on its best laid plans for economic expansion. It is about to experience the boom/bust cycle that is all too familiar to oil driven economies - like Alberta. The 2007 Energy Plan, the "Masters in our own House" manifesto, was meant to usher in a new era of strategic development. Then Lt Governor Ed Roberts read the Speech from the Throne, as crafted by the Danny Williams government:

"Our people are proud nationalists who believe it is only by affirming our identity as Newfoundlanders and Labradorians that we will realize our goal of economic equality within the federation...Our people are ready to take charge of our future and, under [Premier Danny Williams's] leadership, our province will achieve self-reliance by becoming masters of our own house."
"We as Newfoundlanders and Labradorians aspire, not to perpetual subservience, but to self-sufficiency."
"Our people are not content to tolerate a future of relying on others economically. However, our people have now also learned that we will achieve self-reliance economically only by taking charge of our future as a people."

"Our province will achieve self-reliance". Therein lies the fatal flaw. Just as there is no such thing as a "self-made man" the idea that a people, any people, can be "self-reliant" is a concept hundreds of years outdated. In the age of globalization there are no "islands" protected from the deflationary waves. The western world finds its economies being rationalized to those in Asia, and not the other way around - as was originally envisioned.

Still, the nationalistic governments in Newfoundland and Labrador peddle the idea that somehow the power over the future lies in their hands. That the province is an entity unto itself, and the only thing holding it back is the negative attitudes that disagree. So it boldly, with blinders firmly attached, moves forward. It scored some victories with the oil companies for equity shares in offshore projects when oil was at an all time high. It scored a victory for $2 billion in offset payments from the feds when Martin had a minority government and was facing an election. However, when all things were equal it lost. It lost the Abitibi expropriation battle. It lost the recent NAFTA battle with the oil companies over research and development subsidies. It lost countless battles with Hydro Quebec. On and on it goes.

The problem is that despite all these lessons it does not appear to learn. Fast forward to today. The government is trying to force ExxonMobile to build all three $100 million modules in the province, or pay a large fine for not doing so. Exxon has stated the province can not build the third module on time, due to a lack of resources, and it must therefore build it outside the province or face costly delays in first oil. The Premier has threatened them with fines and "troubled waters" if they proceed. The Mayor of St. John's even boycotted a meeting with a top Exxon official in protest. Its the typical us vs them mentality that takes over when the government of Newfoundland and Labrador doesn't get its way. When it can't "take charge". Because controlling economic forces is not something any country can "take charge" of, let alone a province, in a global economy. It is not an achievable goal.

The province can spend its oil royalties as it sees fit. It can build the Muskrat Falls dam as long as it has enough money saved to leverage the rest in financing. It can do all that. But, it can't make iron ore mines any more attractive on the stock markets in a time of obvious, long term, international declines in consumption. It can't force private investors to invest and buy the mines shares on the stock market. It can not keep its young people from voting with their feet and leaving - a record 4000 or so did in the first quarter of 2012. It can not control the price of oil. It can not even accurately project its income each year from oil revenues. As of today, Brent crude futures are trading at $90 a barrel - 30% below budgeted revenues. The trend is downward as the world market place gets hammered by sovereign debt, consumer debt, and the resulting decline in demand. It will be a long term problem-decades long.

It begs the question: How is the provincial government reacting to the change? The answer is the same as usual. Fighting others to perpetuate the myth that we are "masters in our own house". No updated financial document to amend the budget to reflect the obvious massive deficit coming for this year. No plans to halt the Muskrat Falls development despite the mining companies in Labrador being frozen by the chill of world wide deflation. No plans other than the original - hell or high water - blinders firmly on. As we used to say in the army: No plan survives first contact with the enemy. To put the icing on the cake, the PC government passed Bill 29, which essentially guts access to information in the province, so that it can hide all those pesky little bits of reality that might make it known its not masters of its own House.

Monday, June 18, 2012

The New Official Secrets Act - Bill 29

The House of Assembly just wrapped up a historic filibuster on Bill 29, AN ACT TO AMEND THE ACCESS TO INFORMATION AND PROTECTION OF PRIVACY ACT . The four day, marathon session was covered nationally by every major press outlet, and of course locally in both the news and editorial pages province wide. The Centre for Law and Democracy, an internationally recognized organization on access to information, had this to say when asked for comment by the CBC:

"The new cabinet exception is, well, breathtaking in its scope... I think it’s one of the widest exceptions of that sort I’ve seen anywhere... The Newfoundland one, or the proposed cabinet exception, really takes it to another level... I don’t think I’ve ever seen one as broad as that. It really throws in the kitchen sink... What we see in other countries, and in Canada as well, is that governments often abuse those exceptions,and the way the thing is worded now, it’s really wide open to that kind of abuse.”

Very damning wording for any government to receive from an independent body, let alone on the issue of access to information - a basic right in a democratic society. Well, at least most of us view it that way, except, apparently, Justice Minister Collins who disagreed:

"Mr. Speaker, the right to information is an important one, one that we have to protect and guard," Justice Minister Felix Collins said during question period Tuesday. "But it is not absolute."

He then goes on to essentially tell it as it is with the changes to Section 18 of the new Act:

“The auditor general will have access only to those records that the clerk says he can have...
by expanding the list of cabinet records, it expands the list to which he does not have access.”

Worrisome as those words are, and they should concern any and every free thinking person, the really severe, and potentially dangerous words are found further down in the Act.

Section 24:

     24. (1) The head of a public body may refuse to disclose to an applicant information which could reasonably be expected to disclose
(a) trade secrets of a public body or the government of the province;
(b) financial, commercial, scientific or technical information that belongs to a public body or to the government of the province and that has, or is reasonably likely to have, monetary value;
(c) plans that relate to the management of personnel of or the administration of a public body and that have not yet been implemented or made public;
(d) information, the disclosure of which could reasonably be expected to result in the premature disclosure of a proposal or project or in significant loss or gain to a third party;
(e) scientific or technical information obtained through research by an employee of a public body, the disclosure of which could reasonably be expected to deprive the employee of priority of publication;
(f) positions, plans, procedures, criteria or instructions developed for the purpose of contractual or other negotiations by or on behalf of the government of the province or a public body, or considerations which relate to those negotiations;
(g) information, the disclosure of which could reasonably be expected to prejudice the financial or economic interest of the government of the province or a public body; or

(h) information, the disclosure of which could reasonably be expected to be injurious to the ability of the government of the province to manage the economy of the province.

Essentially, this section gives the "head of the public body" complete authority to refuse any information that could relate to any economic, scientific, or techincal information. That would include any information on Muskrat Falls, mining, etc.

Section 27:

   27. (1) The head of a public body shall refuse to disclose to an applicant information that would reveal
(a) trade secrets of a third party;
(b) commercial, financial, labour relations, scientific or technical information of a third party, that is supplied, implicitly or explicitly, in confidence and is treated consistently as confidential information by the third party; or
(c) commercial, financial, labour relations, scientific or technical information the disclosure of which could reasonably be expected to
(i) harm the competitive position of a third party or interfere with the negotiating position of the third party,
(ii) result in similar information no longer being supplied to the public body when it is in the public interest that similar information continue to be supplied,
(iii) result in significant financial loss or gain to any person or organization, or
(iv) reveal information supplied to, or the report of, an arbitrator, mediator, labour relations officer or other person or body appointed to resolve or inquire into a labour relations dispute.
(2) The head of a public body shall refuse to disclose to an applicant information that was obtained on a tax return, gathered for the purpose of determining tax liability or collecting a tax, or royalty information submitted on royalty returns, except where that information is non-identifying aggregate royalty information.
(3) Subsections (1) and (2) do not apply where
(a) the third party consents to the disclosure; or
(b) the information is in a record that is in the custody or control of the Provincial Archives of Newfoundland and Labrador or the archives of a public body and that has been in existence for 50 years or more.

This section backs up Section 24, and specifically uses the wording: "shall not disclose". There is no maybe, no 'it's up to the discretion of the head of the public body'. It very interestingly refers directly to the issues of royalties. This is interesting in that royalties collected from offshore oil are already well documented publicly. They are not a secret. Does it refer to mining royalties? Does it refer to a potential Royalty Trust Agreement for the financing of Muskrat Falls? This section would cover those. So it would appear the government's intentions are to keep these agreements secret - otherwise why single them out specifically in the Act, and leave no room for a head of a public body to do otherwise? The timing of this legislation, prior to the DG3 numbers on Muskrat Falls and its financing, contracts is suspect at best and does nothing to quell the very real suspicions of ordinary, thinking people. Most would consider common sense.
Section 43.1:

43.1 (1) The head of a public body may disregard one or more requests under subsection 8(1) or 35(1) where
(a) because of their repetitive or systematic nature, the requests would unreasonably interfere with the operations of the public body or amount to the abuse of the right to make those requests;
(b) one or more of the requests is frivolous or vexatious; or
(c) one or more of the requests is made in bad faith or is trivial.

This section is arguably the most dangerous to the basic democratic rights we all enjoy - or thought we did. Essentially, it gives the head of any public body the right to deny any request they feel like. It reminds me of the "Conduct unbecoming a member of the Canadian Armed Forces" provision in Canadian military law. It's a catch-all charge. One that if no other charge sticks this will. That is Section 43.1 - a catch-all clause. It gives a Minister the right to dismiss media requests for any information. Same goes for the Official Opposition. Same for the ordinary citizen. It is as undemocratic as you can possibly be without saying you are dictatorial - in words anyway. 
The Canadian Charter of Rights and Freedoms guarntees us:

Fundamental freedoms
2. Everyone has the following fundamental freedoms:
(a) freedom of conscience and religion;
(b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;
(c) freedom of peaceful assembly; and
(d) freedom of association.

The question begs answering: How can one have the freedom of belief and opinion without the knowledge to form it? How can the media be free, and communicate truthfully when it is denied the information to form that truth? How can citizens form the beliefs and opinions that allow them to reason and judge the performance of their government without open and honest access to information that is neither censored nor filtered? This is not a case of martial law. This is not a case of internal insurrection. This is not a case of state secrets at a time of war. No, this is a case of the government of Newfoundland and Labrador being at war with its own citizens. A secret war. A war that requires an "Official Secrets Act" - Bill 29. 

Friday, June 8, 2012

The Alderon/Williams Lawsuit Letter

As some of you may know, I was served with a letter from Alderon Iron Ore Corp two weeks ago today. The story begins with a phone call received on my business phone on May 9, 2012. It was a 416 number, and a woman asked: "What area of town is your business in?" I responded: "the east side." She then asked: " what is your address?" I asked: "Why do you want to know my business address?" She said: " I want to see your work." I said: "You can see our work on our business website." and hung up.

For curiousity, and because I knew a person from Toronto wouldn't be stopping by to see my work, I phoned the 416 number back. Low and behold if it wasn't the number of Cassels Brock law firm in Toronto. Several attempts to contact them for clarification for the need of my address failed to receive a response. The matter has now been sent to the Law Society of Upper Canada in the form of a compaint. You see, it's not legal for a law firm to misrepresent itself to gain information. But I digress. It just so happens that the senior partner of Cassels Brock was named to Alderon's board of directors, along with Danny Williams, on March 28, 2012. Danny Williams was granted 1,125,000 share options on the date he joined the board ( he has since acquired an additional 100,000 shares under 10981 Newfoundland). That compares to John Vettese/director (Cassels Brock) 300,000 share options; John Baker (Altius) 400,000 share options; Todd Burlingame 250,000 share options; Brian Dalton (Altius) 400,000 share options; Gary Norris 250,000 share options; and on it goes. Suffice it to say that of all the directors of Alderon, Danny Williams got the biggest number of share options of any director or officer in the company. Why that is the case? I do not know.

But there is a little background for you. Here is the document served on me by Alderon, although it appears to be almost completely about Danny Williams. Just a quick pointer: You will note that almost all comments on it that Alderon says are defamatory are quotes from the radio host, and not me. You will likely also notice the many references to discussing the Muskrat Falls project, which considering Alderon came out this week publicly campaigning for the project, seems a little rich. More on that later, but for now here is the letter (click on each letter to view):

Sunday, June 3, 2012

Muskrat Falls Deducted

It's important to remember that in the beginning the Muskrat Falls project was billed as Newfoundland and Labrador's green alternative to replacing the Holyrood thermal plant, and bypassing Quebec to be a major exporter of electrical power to the US via Nova Scotia. If there was any surplus power it would: "be recalled as needed for industrial development in Labrador". The word "mines" was not mentioned once in the government's press release . Despite the fact that the government was fully aware of the many mining developments that were at various levels of development, and despite the fact that the government was assisting in those developments, and despite the fact that the government knew full well the mining developments would require massive power that was not currently available, it did not use the word "mining" even once in its press release announcing the Muskrat Falls project. So it flew under the radar.

That was 2010. Fast forward to today. Today there is no agreement between Nalcor and Emera to transmit power to Nova Scotia - the original term sheet expiry date is now some 7 months old. There is no federal subsidy, or even a mention of it, for the Maritime Link that would have seen Emera receive over $300 million to assist with the undersea cable. There in fact is no formal agreement signed between Nalcor and Emera to construct the Island Link from Labrador to Newfoundland. There is no written loan guarantee from the federal government. None of these previously crucial aspects of the original Muskrat Falls agreement are in place. That could mean several things. It could mean everything is just moving incredibly slow - slower than it takes for say many international treaties to be formed and signed. It could also mean that they were never intended in the first place.

Take the private conversation between Emera's CEO and the US consulate:

Given that legacy, Spurr (Emera) remarked that he and his senior colleagues are equally cautious in dealing with the premier (Williams), with knowledge it makes more financial sense for N-L to do a deal with Quebec than with them.
“In fact, Spurr indicated he wouldn't be surprised if Williams ended up doing just that, and leaving Spurr and colleagues to speculate that Williams might be using them to exert more pressure on Quebec to offer a better deal for N-L.”

Of course Mr Spurr may have only been correct in his suspicion, but not in his conclusion. It could also be the case, knowing Williams' penchant for trying to play the federal government for funds, that the real goal was to have the federal government grant the provincial government a loan guarantee based on an "Atlantic Gateway" concept. Once the loan guarantee was granted Newfoundland and Labrador could back out of the Emera deal, and use a portion of that loan guarantee for a dam only project at Muskrat Falls. In other words, it could be that Williams' plan was not to build a link between Newfoundland and Labrador, and the same goes for the Newfoundland and Labrador/Nova Scotia Maritime Link. Knowing how Williams' tends to use the nationalist card in his dealings with the feds, it is entirely likely a threat of nationalist backlash might be used against the federal government if it did not provide a loan guarantee, at least proportionately, for a dam only project -as is happening right now.

We don't know for sure. All we can do is deduce from the evidence. Here's one bit from Williams on April 3, 2012:

" we have a federal loan guarantee worth up to a billion dollars"
Now a loan guarantee of up to a billion dollars would be insignificant on a $6-8 billion dollar project, but a dam only project could cost as little as $3 billion. A billion dollar loan guarantee in that context would make more sense, and at least have an overall impact on the financing costs. That's if you believe a dam only project could work in Labrador.

Here is where more evidence comes. The greatest source of clues lately has actually been in the House of Assembly itself. Minister of Natural Resources Jerome Kennedy has laid it out there in plain language. From Hansard:

Hansard 29 March, 2012

MR. KENNEDY: "Thank you, Mr. Speaker...
We have a very small market here and the oil companies are telling us that we are not going to build an infrastructure to bring a very small amount of natural gas to power Holyrood when, Mr. Speaker, there is no market. I say to the member for - the Opposition House Leader, even if we refurbished Holyrood, what does that do for Labrador mining projects? "

Hansard 30 May, 2012

MR. KENNEDY: "Yes, Mr. Speaker
What we are doing and what we have indicated is that there will be power available with Muskrat Falls, Mr. Speaker, if it is sanctioned and developed. Mr. Speaker, there are no firm contracts signed. I have met with all these companies. There is only one company that said we are willing to buy power. We are in discussions, Mr. Speaker, with these companies and if they want to sign firm contracts, then we will guarantee the power if Muskrat Falls is sanctioned, Mr. Speaker."

MR. KENNEDY: "Thank you, Mr. Speaker.
On March 27, the Member for Cartwright - L'Anse au Clair asked the Minister of Natural Resources to table in the House any correspondence, analysis or reports that government has in relation to the current and projected demand for electricity in Labrador and how such demand can be met.

Newfoundland and Labrador Hydro, Mr. Speaker, is a Crown corporation owned by the people of Newfoundland and Labrador. Its focus is on delivering safe, reliable, least-cost power to residents, businesses, and industrial customers in Newfoundland and Labrador.

Newfoundland and Labrador Hydro, Mr. Speaker, is also mandated to ensure that adequate planning occurs for the future generation, transmission, and distribution of power in the Province. There is currently 525 megawatts of available electricity from the Churchill Falls Generating Station to meet demand in Labrador. This includes the 225 Twin Falls or TwinCo block and the 300 megawatt recall block.

Labrador industrial customers, Mr. Speaker, currently use the full 225 megawatt Twin Falls block and an additional sixty-two megawatts of firm power from the recall block. After Hydro's rural customers and industrial contracts are supplied, there is between eighty and 280 megawatts of recall power available, depending on the time of year. At peak during the winter, Mr. Speaker, in Labrador, 220 megawatts of power is required, thereby leaving eighty megawatts for other use in Labrador or for other export purposes.

Strong commodity prices, Mr. Speaker, have resulted in record levels of mineral exploration in Western Labrador resulting in the announcement of a number of new mining projects. If all projects go ahead, Mr. Speaker, there will be an estimated $10 billion to $15 billion in capital investment for mining developments in Labrador in the next ten years. These new developments will require an adequate supply of electrical power at competitive rates to proceed. So much depends, however, on the need for iron ore in China. The demand for iron ore is affected directly by the Chinese economy.

If Muskrat Falls does not proceed, Mr. Speaker, there will not be sufficient power available for all of the mining projects to proceed. Over the last number of months the minister and departmental officials have held numerous meetings with mining companies, including: the Iron Ore Company of Canada, Cliff's Natural Resources in Wabush, Alderon Iron Ore Corporation, New Millennium Iron Corporation, Tata Steel, Labrador Iron Mines, Vale, and Grand River Ironsands. These meetings have covered numerous topics, Mr. Speaker, and have included discussions regarding power requirements and transmission infrastructure.

As stated earlier, these projects are at various stages, Mr. Speaker, ranging from early stage, pre-feasibility studies, environmental assessment studies, and those that have commenced construction. The normal process, Mr. Speaker, for a new industrial or large commercial customer will be to approach Newfoundland and Labrador Hydro to identify their projects' needs and make a formal request for power.

The following companies, Mr. Speaker, have identified a need for power: IOC, Alderon, Tata/New Millennium, Vale, Labrador Iron Mines, and Grand River Ironsands. Once received, Nalcor then undertakes initial engineering studies that are required to provide the customer with a preliminary estimate of cost and timelines. There is a chart prepared by Nalcor, Mr. Speaker, which summarizes their assessment of potential new demand in Labrador. The chart is based on an aggregate of electricity demand from these projected projects. Some of the companies the department has spoken with have indicated other possible power requirements, such as multiple expansions, but formal requests for service have not yet been made. Projects currently under construction include Tata Steel, Canada's DSO project, and Phase 2 of the Iron Ore Company of Canada's Concentrate Expansion Program. Labrador Iron Mines is already in production and is exploring the potential to transition from electricity supplied by diesel units to hydropower supplied by the isolated Menihek substation.

Projects undergoing feasibility study included Alderon's Kami Project, Grand River Ironsands Churchill River Project, IOC's CEP stage three Project, IOC's Long-term Expansion Program, Tata's LabMag Project, and Vale's underground mine at Voisey's Bay.

Longer term developments included a second phase for the Kami project, the Julienne Lake Project, a second phase for Grand River Ironsands, further expansion associated with IOC, and the Paladin Aurora Michelin Uranium Project near Makkovik."

To satisfy these future mining developments in Labrador, there clearly needs to be a new source of power supplied. While our government would like to develop Gull Island, Mr. Speaker, it is not an option at present. Gull Island can only proceed if our Province can arrive at a favourable arrangement with Quebec on transmission. Gull Island, if developed, can supply an additional 2,250 megawatts of power for Labrador industrial use or export.

Muskrat Falls is an ideal source for new electricity. At 824 megawatts, Mr. Speaker, this project will meet the growing needs of the Island population, and enable us to close the expensive and environmentally unfriendly Holyrood Thermal Generating Station. It will also enable us, Mr. Speaker, to meet the growing needs of the mining industry. Approximately 40 per cent of the output from Muskrat Falls will be available to meet this energy demand. Until such time as the power is required, the excess power will be sold on the spot markets in the Maritimes and Northeastern United States.

The development of Muskrat Falls, Mr. Speaker, will also support significant regional economic development in Labrador. Power will be available for industrial expansion and development in the region at competitive rates, encouraging development, which brings further business opportunities."

The nuts and bolts of Kennedy's comments are utterly at odds. On the one hand he says power to the mines will be provided once Holyrood is replaced. On the the other hand he lists off nine plus mining projects that will require all and more of the 824 MW that Muskrat Falls could produce. Of course, that does not factor in the 20% or 165MW that have been promised to Emera in return for their investment in the Island and Martime Links. There is clearly something not right with the Minister's math. Especially considering his analysis that during the winter months, with full recall of the 300 MW from the Upper Churchill, that there was only 80 MW left for use.

Then, on the evening of May 29, 2012 Premier Dunderdale stands in the House of Assembly and does an hour or so rant of which the following is a partial transcript

"Mr Speaker we have to pay for generation of power. So if we, unless there is a huge population explosion in Labrador, Mr Speaker, something absolutely unbelievable happens in Labrador, along with the great mining developments that are going on up there now Mr Speaker, Muskrat Falls would never be developed because people would never be able to afford the electricity and the mining companies would never be able to afford the electricity. And we had a mining, the Minister of Natural Resources and I met with a mining company in my boardroom on Friday, Mr Speaker, and they are very interested in whats happening in Labrador, because they are ready to move on their project...
They need Muskrat Falls to be developed Mr Speaker...Mr Speaker, they understand that if Muskrat Falls does not go ahead what happens in Labrador from that point on lies squarely in the hands of Hydro Quebec and the province of Quebec Mr Speaker...We enable development in Labrador Mr Speaker, because we absorb so much of the costs. We are able to sell electricity power to atleast six mining developments we hope in Labrador Mr Speaker...Mr Speaker, does anyone have confidence that when mines go to Hydro Quebec looking for energy for developments in Labrador that they are going to get the best industrial rates in Atlantic Canada? Not likely Mr Speaker...All those benefits are on the horizon Mr Speaker, but they need power."

So again we can see the pattern. There are numerous mines in Labrador putting pressure on the provincial government to move forward with Muskrat Falls quickly as their developments are ready to go - or close to it. The twist in Dunderdale's comments:
 "...are going to get the best industrial rates in Atlantic Canada?"
Kennedy's comments to the Telegram were close as well:
“I have met with IOC, Tata Steel, Alderon Resources, Labrador Iron Sands, Labrador Iron Mines, and Vale Inco; they all need power. They are saying to us: where can we get the power? They want the power at industrial rates because industrial rates in Quebec and in Manitoba, you have to be competitive. So, we are still in the process of determining what those rates will be.”

To listen to, and believe the government, you would think there were mines begging for power, at competetive rates, and that at this time no decisions had been made. That any number of senior mining executives would be chewing their nails in nervous fashion over the apparent state of flux the project is in. Certainly, there is a hint of that in Alderon's annual return filed with the US Securities Commission:

"Alderon needs to enter into contract with external service and utility providers

Mining, processing, development and exploration activities depend, to one degree or another, on adequate
infrastructure. In order to develop a mine at the Kami Property, Alderon will need to negotiate and
conclude various agreements with external service and utility providers for rail transportation, power and
port access and these are important determinants which affect capital and operating costs.
The Company’s future operations will require rail transportation from the Kami Property to a sea port
(expected to be the Port of Sept-Îles) and ship berthing, storage and loading facilities at such port. The
Company has not yet concluded agreements with the relevant rail companies or port operators
necessary for the transportation and handling of the Company’s planned production of iron ore and
there can be no assurance that agreements on acceptable terms will be concluded. The inability to
conclude any such agreements could have a material adverse effect on the Company’s results of
operations and financial condition and render the development of a mine on the Kami Property unviable...

Although low cost power from a major hydroelectric development at Churchill Falls to the east is
currently transmitted into the Wabush region for the existing mine operations, the current availability of
additional electric power on the existing infrastructure in the region is limited. The solution to the current
power capacity situation is the construction of a third 230 kV line from Churchill Falls; however, no
agreements have been reached for such construction and there is no certainty it will occur. If the current
power capacity issues in the Wabush region are not resolved in time for the Kami Property’s
development, Alderon will have to investigate other sources of power. There is no certainty that the
Company will be able to access sources of power on economically feasible terms and this could have a
material adverse effect on the Company’s results of operations and financial condition and render the
development of a mine on the Kami Property unviable."

However, and in a seeming direct contradiction to that statement, Alderon's Chief Executive Officer Tayfun Eldem, states in a corporate promotional video on the Kami project :
"We have very cheap power available to us at competitive rates that we believe will be a great advantage to Alderon."
That comment does not seem to square up with the comments made by the government. That comment does seem to square up with the comments of  Alderon's Executive Chairman Mark Morabito when, in the same promotional video, he states:
"There is no other iron ore project in North America, and very few in the world, get to production faster than we can and particularity at our low cost. In order to create an iron ore mine what you need is access to infrastructure, because you are required to move tons and tons of material. And so you need rail, you need power, you need ports. There are alot of iron ore deposits in the world that have been identified that have none of these things and if you want to put those things in it requires billions of dollars in capital and years of time to build that infrastructure. Here we are, we've found a deposit inside an existing iron ore mining camp with rail, with power, and with port."

So, to summarize by way of deduction, we have a government desperately trying to push a hydro electric development through to supply mines with power in Labrador. That government is being dishonest with its citizens as to the intent of the development, and its reasoning does not hold up to the least amount of scrutiny. For example, somebody should ask the Premier how much power (how many MW) would Alderon's Kami project require? Or any number of the rest of them that they've admitted to being in talks with. A simple question. Then the Muskrat Math will become quite evident. Cap Ex, by way of consumption example , apparently needs around 250 MW for it's mining project in Quebec. With only about 659 MW available after Emera gets their supposed share, does it defy common sense to believe that mining operations in Labrador could be satisfied? Not even close. Does it mean that that Maritime and Island Links are likely not on the table and never were? Yes. Does it mean the vast majority of KWHs being produced by a Muskrat Falls project will be sold at 3-4 cents per KWH to mining operations? Yes.

Does that mean the taxpayers/ratepayers of Newfoundland and Labrador will be massively subsidizing mining operations in Labrador for generations? Yes it absolutely does. 

It's just a matter of simple deduction.