Living large in Labrador

Posted on August 24, 2012 | Atlantic Business Magazine | 0 Comments

Current mines are expanding. new ones are entering production. Exploration is taking off. With $16 billion in potential projects ahead, Labrador’s future is looking very bright indeed.

Nick McGrath, Newfoundland and Labrador’s Minister Responsible for Labrador Affairs, moved from St. John’s to Labrador City in 1978, when he was just 19. At the time, there were only two operational mines in Labrador – Wabush Mines and the Iron Ore Company of Canada (IOC) – both in Labrador West.

A young lad in search of opportunity, McGrath landed in a town reeling in the after-affects of a major strike at the IOC mines. Coming from St. John’s, it was not only overwhelming, but isolated too: what would become the Trans-Labrador Highway then only reached about 20 kilometres out of Labrador City before stopping short.

“It was a very emotional time for Labrador,” says McGrath. “I didn’t understand what it meant to live in a one-industry town. It was a bit difficult to deal with.”

It didn’t take long, however, before McGrath stopped thinking of his new hometown as “a small town in the middle of nowhere,” and began to recognize it as remarkably urbanized and affluent. McGrath gradually settled into Labrador life, engaging in the community and eventually opening several businesses in the area.

Thirty-four years later, and it might be fair to say Labrador is making good on all its promise.

Although the region has experienced its share of boom and bust, since the 1990s there’s been a steady build in business, exploration, and optimism. This year marks a new peak in industrial activity in the Big Land – and it’s a trend that’s set to continue.

Decades after starting operations, the IOC and Wabush mines are both in expansion phases. They have been joined by other major players, including mines in Voisey’s Bay and, last year, Labrador Iron Mines in northeast Labrador. Additional mines will start production in the next year or two.

Then there is the long list of exploration sites for iron, uranium, rare earth elements, and other minerals, dotted across the land.

Activity is booming in other sectors as well, including upgrades at Churchill Falls (airport runway rehabilitation, the ongoing transformer replacement program, and new accommodations for the growing number of contracted workers), and the potential $5-billion Muskrat Falls hydroelectricity development.

And that 20 km of rough road McGrath remembers? Paving crews have been full steam ahead in summer 2012 and Phase 1 of the Trans-Labrador Highway – the 653 km between Labrador City and Happy Valley-Goose Bay – should be complete by 2014.

According to the Atlantic Provinces Economic Council’s Major Projects Inventory, released June 2012, Labrador is a “hot spot,” with over $16 billion in potential projects on the horizon.

“This is a continuous good news story for Labrador,” says McGrath. And it’s just the start. “The next decade is going to be huge.”

Expansion planning
Growth does bring challenges, and parts of Labrador are already dealing with some big ones, including severe shortages in labour and housing. Volatile world markets will determine the viability of many of Labrador’s projects; the Eurozone instability is not going unnoticed.

Heather Bruce-Veitch, IOC’s director of external relations, explains that IOC is expanding carefully, and with the longterm health of the operation – and nearby communities – in mind.

Over the past 20 years, IOC has invested over $2 billion in capital infrastructure, the vast majority of it in Labrador West. By the end of 2012, the company will complete its first and second concentrator expansion projects, increasing annual production from 18 million to 22 million tonnes.

“In the longer term, we are well-positioned to expand, but in the shorter term we need to be extra cautious as the market is still showing signs of volatility,” says Bruce- Veitch. “We want to be a business that can ride out any economic downturn … not a ‘boom and bust’ operation.

“Even if in the short term the market is volatile, the economic situation is tough, we still need to secure our future by increasing capacity and productivity while lowering our costs. Our expansion projects aim to do so.”

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