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Kami Benefits Agreement Raises the Bar for Future Mining Development in Newfoundland and Labrador

Executive Council
Natural Resources
May 27, 2014

Maximizing Benefits through Responsible Development

Today, the Honourable Tom Marshall, Premier of Newfoundland and Labrador, announced the completion of the benefits agreement for the Kami Iron Ore Project in western Labrador.

“The benefits agreement for the Kami Iron Ore Project is great news for Labrador and raises the bar for operators looking to do business in the province. Remaining true to this government’s longstanding commitment to ensure natural resource development is maximized for the people of the province, ‎we have set high standards to ensure industrial and employment benefits accrue directly to Labradorians and Newfoundlanders. I’m looking forward to visiting Labrador West again very soon to meet with people in the region who will benefit directly from this agreement.”
– The Honourable Tom Marshall, Premier of Newfoundland and Labrador

The Kami Iron Ore Project is owned by Alderon (75 per cent) and Hebei Iron and Steel Group Company Limited (25 per cent) through the Kami Mine Limited Partnership. The first phase of the project will produce eight million tonnes of concentrate annually and has the potential to expand to 16 million tonnes. Mining and surface leases are also being finalized today, and construction is expected to begin this summer.

“This agreement secures significant long-term economic benefits for the people of Newfoundland and Labrador from the Kami Project. We continue to receive strong support from the Provincial Government and we look forward to developing our Kami Project within the framework established by this agreement.”
– Tayfun Eldem, President and CEO, Alderon

Residents of Newfoundland and Labrador will be provided first consideration for employment during all phases of the project. A Labrador first hiring priority protocol has been established and these commitments must be taken into account in any collective agreements and apply to all contractors and sub-contractors.

“The Kami Iron Ore Project will bring many opportunities to Newfoundlanders and Labradorians. The project will create direct employment for 800 workers at the peak of construction and at least 400 during the operations phase. In addition, the project will contribute at least $18 billion to provincial GDP and $2.6 billion in taxes and royalties to the Provincial Government over its anticipated 30-year life. We look forward to the start of the project in Labrador over the coming months.”
– The Honourable Derrick Dalley, Minister of Natural Resources

Suppliers in the province will be provided full and fair opportunity and first consideration for procurement opportunities during all phases of the project, reinforced through the establishment of a Labrador-first procurement priority protocol. Kami LP and its Engineering Procurement Construction Management contractor will maximize the use of provincial suppliers, on a competitive basis.

“Labrador West has a well-established mining industry that has brought considerable economic activity to the region for many years. This project positions the region for continued growth over the long-term and will bring economic and other benefits to businesses, residents, and the region as a whole.”
– The Honourable Nick McGrath, Minister Responsible for Labrador and Aboriginal Affairs

For the first time in this province, the benefits agreement features firm commitments to hire a minimum number of apprentices for all phases of the project. The partnership commits to a minimum of 15 per cent of the skilled trades workforce to be apprentices for the construction phase of the project, and a minimum of 25 per cent of the skilled trades workforce to be apprentices during the operations phase. Further details on benefits related to apprenticeship can be found in the Backgrounder – Kami Iron Ore Project Supports Employment, Training and Research.

The Provincial Government continues to be a leader in gender equity and diversity planning, as evidenced in the plan with Kami LP. Qualified women, persons with disabilities, Aboriginal persons and visible minorities will have equitable access to the many employment and business opportunities associated with the project. One such initiative includes the provision of an employee childcare centre. Further details on the gender equity and diversity plan can be found in the Backgrounder – Kami Iron Ore Project Commits to Gender Equity and Diversity.

QUICK FACTS

  • The Provincial Government and the Kami Mine Limited Partnership have announced a benefits agreement to advance the Kami Iron Ore Project in western Labrador.
  • The benefits agreement establishes a process to ensure priority for Newfoundland and Labrador participation in the project including hiring and procurement opportunities.
  • For the first time in this province, the benefits agreement features firm commitments to hire a minimum number of apprentices for all phases of the project.
  • The agreement also includes a commitment from Kami LP to fully implement and abide by its Gender Equity and Diversity Plan.
  • The agreement will be posted online in the coming days.

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Media contacts:
Milly Brown
Director of Communications
Office of the Premier
709-729-3960
millybrown@gov.nl.ca

Diana Quinton
Director of Communications
Department of Natural Resources
709-729-5282, 631-8155
dianaquinton@gov.nl.ca

Scott Barfoot
Director of Communications
Department of Transportation and Works
709-729-3015, 690-6290
scottbarfoot@gov.nl.ca

Evelyn Cox
Alderon Iron Ore Corp.
1-604-681-8030 ext 223

Natural Resources
May 27, 2014

 

BACKGROUNDER
Kami Iron Ore Project Secures Economic and Employment Opportunities

The Government of Newfoundland and Labrador continues to support the long-term development of the province’s mining industry. The benefits agreement for the Kami Iron Ore Project will provide significant industrial benefits and employment opportunities for Newfoundlanders and Labradorians.

The project will create direct employment for 800 workers at the peak of construction and at least 400 during the operations phase. In addition, the project will contribute at least $18 billion to provincial GDP and $2.6 billion in taxe and royalties to the Provincial Government over its anticipated 30-year life.

Project Management and Engineering

  • Kami Mine Limited Partnership (Kami LP) and its Engineering Procurement Construction Management contractor will establish and maintain project offices in the province with appropriate levels of decision-making to develop and operate the project.
  • Project office locations will include, but are not limited to, Labrador City/Wabush and St. John’s.
  • Kami LP’s corporate office, corporate personnel and functions will be located in the province.
  • Kami LP’s CEO will relocate to province within one year and initiate corporate office.
  • Remaining senior management will relocate to the province within two years of reaching commercial production.
  • During the construction phase, not less than 60 per cent of project management, engineering and procurement and construction management person-hours will be performed in the province.
  • During the construction phase, not less than 50 per cent of detailed engineering design person-hours will be performed in the province.
  • If the project moves ahead with Phase Two, which would be an expansion of production, not less than 90 per cent of total project management, engineering, and procurement and construction management will be performed in the province.
  • If Phase Two proceeds, not less than 75 per cent of detailed engineering design person-hours will be performed in the province.
  • All operations phase engineering will be performed in the province.
  • Kami LP will maximize the use of provincial engineering graduates and/or co-op students for the project.

Employment, Procurement and Contracting

  • Provincial residents and suppliers will be provided full and fair opportunity and first consideration for employment and procurement opportunities for all phases of the project.
  • A Labrador first hiring and procurement protocol has been established.
  • These commitments must be taken into account in any collective agreements and apply to all contractors and sub-contractors.
  • Hiring of project personnel and procurement activities during the construction phase will be coordinated and led by Kami LP and its Engineering Procurement Construction Management contractor from offices in the province.
  • Kami LP and its Engineering Procurement Construction Management contractor will maximize the use of provincial suppliers on a competitive basis.
  • There will be a fly-in/fly-out workforce where necessary during the construction phase.
  • Within two years after reaching commercial production, Kami LP will achieve a 100 per cent provincial resident workforce. Kami LP will use all reasonable means to accelerate this deliverable.
  • Timely communication of project employment and procurement opportunities will be required.

Gender Equity and Diversity

  • Kami LP will fully implement and abide by its Gender Equity and Diversity Plan.
  • Further details on the Gender Equity and Diversity Plan can be found in the Backgrounder – Kami Iron Ore Project Commits to Gender Equity and Diversity.

Reporting

  • The Provincial Government will be provided with monthly, quarterly and annual reports.
  • The reports will include information such as updates, total number of person-hours of work, total number of person-hours of project management and design work.

Research and Development

  • Any research and development activities undertaken for the project by Kami LP or its contractors over the life of the project will utilize provincial research institutions, laboratories or other analytical facilities in the province where such exist.

Education, Training and Apprentices

  • Kami LP shall establish an education and training fund of not less than $1 million per year over a seven year period, totaling not less than $7 million after certain operational milestones are met.
  • Kami LP agrees to maximize the training and development of registered apprentices as part of its responsibility to maintain a supply of skilled tradespersons for the project.
  • Further details on the education and training fund and apprenticeship can be found in the Backgrounder – Kami Iron Ore Project Supports Employment, Training and Research.

Pelletizing

  • Kami LP is released from further processing obligations, including any requirements related to the construction and operation of a pellet plant.
  • Kami LP commits that should it expand its product offering during the life of the project to include pelletizing product, it will construct and operate a pellet plant in the province.

Media contact:
Diana Quinton
Director of Communications
Department of Natural Resources
709-729-5282, 631-8155
dianaquinton@gov.nl.ca

Natural Resources
Advanced Education and Skills
May 27, 2014

BACKGROUNDER
Kami Iron Ore Project Supports Employment, Training and Research

The Government of Newfoundland and Labrador continues to invest in affordable, accessible post-secondary education to meet a growing demand for skilled labour, fuelled in part by major project developments such as the Kami Iron Ore Project located in western Labrador.

The Kami Iron Ore Project benefits agreement will support excellence in post-secondary education through education and training opportunities.

Apprentices

  • The Kami Mine Limited Partnership (Kami LP) agrees to maximize the training and development of registered apprentices as part of its responsibility to maintain a supply of skilled tradespersons for the project.
  • The partnership commits to a minimum of 15 per cent of the skilled trades workforce to be apprentices for the construction phase of the project.
  • The partnership commits to a minimum of 25 per cent of the skilled trades workforce to be apprentices during the operations phase.
  • As part of Kami LP’s recognition of the value and importance of apprentices to resource development projects, Kami LP will also inform its contractors, sub-contractors, and successors of programs and resources available to support the role of apprentices.

Education and Training

  • The benefits agreement provides for the establishment of an education and training fund of not less than $1 million per year over a seven-year period, totaling not less than $7 million.
  • The initial $1 million per year payment will be made on the earlier of (i) two calendar years after the calendar year that commercial production is achieved or (ii) two and one half calendar years after the calendar year that initial production is achieved.
  • A committee will be established to oversee the fund and will include representatives of Kami LP and the Provincial Government.
  • The education and training fund is specific to Phase One of the project.
  • If Kami LP decides to proceed with Phase Two of the project, which would be an expansion of production, a new education and training fund will be negotiated with the province.

Research and Development

  • Any research and development activities undertaken by Kami LP or its contractors for the life of the project will utilize Newfoundland and Labrador research institutions, laboratories or other analytical facitilies in the province where such exists.

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Media contacts:

John Tompkins
Director of Communications
Department of Advanced Education and
Skills
709-729-0753, 728-7762
jtompkins@gov.nl.caDiana Quinton
Director of Communications
Department of Natural Resources
709-729-5282, 631-8155
dianaquinton@gov.nl.ca

Natural Resources
Executive Council
May 27, 2014

BACKGROUNDER
Kami Iron Ore Project Commits to Gender Equity and Diversity

The Provincial Government continues to be a leader in gender equity and diversity planning. The plan developed for the Kami Iron Ore Project in western Labrador is the latest example of government and industry’s commitment to gender equity and diversity in the natural resource sector.

Equitable Access to Opportunities

  • Through the implementation of this plan, qualified women, persons with disabilities, Aboriginal persons and visible minorities will have equitable access to the many employment and business opportunities associated with the project.
  • The plan outlines elements of the gender equity and diversity program for both construction and operations phases using a comprehensive human resources view. It includes commitments that support education and training, recruitment and selection, and retention and promotion for women and other under-represented groups.
  • The plan includes a number of initiatives designed to support supplier diversity and participation of women-owned businesses.
  • Kami Mine Limited Partnership has committed to working toward overall employment targets for women that range from 17 per cent for the construction phase to 30 per cent for operations (five years post commercial production), with targets specific to skilled trades, and professional and technical occupational categories.
  • The plan also includes commitments for female apprentices that will support the advancement of many young women in moving through their apprenticeship programs toward journeyperson status.
  • A number of initiatives designed to address traditional barriers to the employment of women on resource-based projects are included in the plan. Highlights include:
    • The provision of a 40-space employee childcare centre and $50,000 in seed capital for an external company/organization to operate the centre;
    • The development of employee and vendor databases to allow for the identification of individuals interested in working on, or seeking business opportunities related to the project;
    • The funding of scholarships;
    • The development of a mentorship/sponsorship program;
    • A commitment to the use of work environment surveys/exit interviews to identify diversity–related issues, and act on the results; and
    • A strong commitment to continuous improvement in gender and diversity practices over the life of the project.

– 30 –

Media contacts:

Sara Norris
Program, Policy and Communications
Analyst
Women’s Policy Office
709-729-6225
saranorris@gov.nl.ca

Diana Quinton
Director of Communications
Department of Natural Resources
709-729-5282, 631-8155
dianaquinton@gov.nl.ca

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