April 23, 2008

Power Transmission

Group lobbies for Terrace-to-Bob Quinn Lake power line

Richard Gilbert

staff writer

Construction at the Galore Creek mine was suspended late last year, but some nearby residents would like the plans for a high-voltage power line in northwest B.C. to be revived.

After the suspension of construction at the mine, Richard Neufeld, minister of energy, mines and petroleum resources, said that the 335 kilometre extension of a 287 kilovolt power line from Terrace to Bob Quinn Lake may not proceed.

Despite this major setback, the Northwest Power Line Coalition released preliminary findings of a study on April 16 about the potential benefits of a power line along Highway 37 in northwest B.C.

“Even without the Galore Creek project, the benefits of a power line along Highway 37 are significant,” said Pierre Lebel, spokesperson for the Northwest Power Line Coalition.

“There is a potential to realize $3.5 billion in capital investment in northwest B.C., but this is unlikely to happen without the power line.”

Even though the estimate does not include the Galore Creek project, some communities in northern B.C. believe that construction of the power line would provide an economic benefit to the region.

“The preliminary findings of the Macquarie study suggest that electrification of Highway 37 will attract needed investment and jobs for the region, including additional opportunities for joint ventures with First Nations,” said Janine North, CEO of the Northern Development Initiative Trust.

The investments have the potential to create 2,000 jobs, generate about $300 million in annual revenues and provide more than $75 million in annual taxes to government.

The Northwest Power Line Coalition includes the Northern Development Initiative Trust with its forty member communities, the Mining Association of British Columbia, the Association of Mineral Exploration of British Columbia, First Nations groups, mining companies, independent power producers and local businesses.

Macquarie North America Ltd. was retained in March 2008 to examine the economic aspects of the Northwest Power Line along Highway 37.

Macquarie Group is an international financial institution with expertise in major capital infrastructure project financing. The preliminary findings are subject to review and finalization.

The final report is expected to be completed in the spring of 2008.

Construction activities at the Galore Creek copper-gold-silver mine were suspended by NovaGold Resources Inc. and Teck Cominco Ltd. after the first season of construction was completed.

A review released in November 2007 stated that high capital costs, a longer construction schedule and reduced operating margins as a result of the stronger Canadian dollar made the project uneconomic at estimated long-term metal prices.

The project strategy review said the capital cost of the project could reach $5 billion, which was about $2.8 billion more than the original estimate.

Under the deal Nova Gold and Teck Cominco were to invest $158 million dollars into the $400 million dollar project.

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