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NEWS: Export Development loans $250 million to Vale for Sandy Pond plant

The Globe and Mail reports today that, “Export Development Canada is set to announce Monday one of the largest deals in the government agency’s 65-year history: up to $1 billion (US) in financing to Brazilian miner Vale SA. …The loan is for Vale’s projects in Canada and to encourage the world’s second-largest miner to use more Canadian suppliers in its operations outside the country. …Asked whether Vale is obligated to use Canadian suppliers as a condition of the deal, (the EDC’s chief executive officer) said it is not formally written into the agreement. Rather it is an ‘understanding’… Terms of the loan weren’t disclosed.”

In April 2009, Vale Inco started constructing a nickel processing plant at Long Harbour in Newfoundland. The plant – to be completed in 2013 – will process nickel from the company’s operations in Voisey’s Bay and dump approximately 400,000 tonnes of tailings annually into Sandy Pond, a 30-hectare freshwater lake. This destruction of Sandy Pond is possible because of the ‘Schedule 2′ exemption in the Metal Mining Effluent Regulations of the federal Fisheries Act.

The Globe and Mail reports today that, “up to $250 million (of the EDC financing for Vale) will go toward the Long Harbour nickel processing plant…”

Russell Wangersky, the editorial page editor of the St. John’s Telegram, wrote in The Western Star in July that, “In order to use Sandy Pond as a slurry dump, the company needed permission from both the federal and provincial governments – permission that was granted, with the provincial environment minister saying the move was a good balance between environmental protection and economic development. Maybe. But what’s a lake worth? …In this case, using Sandy Pond as a tailings pond was estimated to cost $62 million; a man-made containment area would have cost $490 million. That puts the market value of Sandy Pond at $428 million.”

Wangersky described this as a “giveaway” to Vale and wrote “Let’s not do this again.” But it would appear that it is happening again.

Vale posted a second-quarter profit of $3.7 billion this year.