'We knew there were problems,' Tom Marshall says of Wabush Mines

The approval of a third transmission line between Churchill Falls and Labrador West was a relief to many people in Wabush, following the announcement earlier this week that operations at Wabush Mines would cease.

Premier Tom Marshall made the announcement on Thursday that Newfoundland and Labrador Hydro was given approval to start construction on the transmission line.

"The construction of the third transmission line will supply power for planned new mining developments, support future industrial growth, and improve reliability for all customers in Labrador West," he said during the announcement in Wabush.

Marshall said the focus to finalize the agreement for the third transmission line was to seal the deal to make sure tax dollars would stay in this province.

"We wanted to ensure for the future that any mining development that takes place here will have to allocate their income so that taxes will be paid here, not to a different province," he said.

Marshall said the $300-million project would be exempt from the Public Utilities Board review during construction.

Marshall said government knew Wabush Mines parent company Cliffs Natural Resources was having troubles with the Labrador operation, but was hopeful a shutdown could be avoided.

"We knew there were problems, and we knew that there was the option of idling," he said.

"With a mine, there's always a possibility that the mine, from the day it starts, it's going to shut down at some point. But then new reserves are found, new technologies are discovered, and in many cases the life of the mine is extended."

'Cautiously optimistic' Wabush will start back up

According to Marshall, the province is still hopeful that the company will find a buyer for Wabush Mines to resume operations.

"The mine right now isn't closed, it's idle, and they're looking for a buyer and we're obviously hopeful, or cautiously optimistic, that there could be a new operator to come in and take over that mine," he said.

"Let me be clear that the government of Newfoundland and Labrador will stand with the people of Wabush. We will ensure that the company meets all of its commitments to its employees, to the town, and to the province, and we will also work with the company as it seeks to find a buyer for its assets here."

The approval of the transmission line means the Kami mine proposed by Alderon Iron Ore Corp. will likely be able to go ahead, which came as a big relief to many workers at the idled Wabush Mines.

Alderon officials said earlier this week that its Kami operation would be able to hire workers from Wabush Mines who find themselves without jobs.

Alderon could employ up to 800 workers during construction of the Kami mine.

The project may start construction as early as this spring.