Hello MarlboroD,

You have: "A small concern ... I wonder if this would put any pressure on the concept of using natural gas as a primary energy input, ie. pressure that KWG would lose certain political support if they didn't support Five Nations by agreeing to purchase sufficient electricity to match goals."

This is a valid concern. It's always a balancing act, but KWG would surely support the 5 Nations initiative for their proposal to import power from Quebec. The demand for power would be for:

- FN communities that want to get off diesel (but don't get rid of those diesel generators since they are good backups for grid failure...one ice storm would wipe out grid power).

- Companies such as KWG, NOT and others would need on-site power (they can start with diesels, but would switch to grid power anytime, if it's cheaper). As a rough guess, each mine site would need ~50MW, so 2 companies (KWG and NOT) would have a demand of ~100MW. Others companies, even for exploration camps would need power and this would push up the demand.

- Let's leave the electricity co-generation at the Gas Super Converter in south end aside, i.e. the natural gas would be used for the roasting process ONLY, and not for making electricity. This Gas Converter plant would use cheap electricity coming from Quebec, through 5 Nations network, to run the plant equiment and keeping the lights on. Let's say, this would add another 50MW?

There would be railhead and transfer facilities that would need electric power. So, at a first glance I don't see KWG as a competitor to the 5 Nations plan, if they just drop the electricity co-generation option.

- The Gas Super Converter concept is for business partners (a lot cheaper to operate, hence larger profit margins) and the Ontario government (it would not require some billions of dollars subsidy from the government. It would be ~$1B subsidy for electricity over approx 10 years for CLF Capreol smelter, which would cost $1.8B to build (total cost of BT plan was $3.3B, including the smelter which is a BIGGEST ticket item, the next in line is the $0.8B on-site upgrader, noting that KWG does not require an upgrader for BD DSO, and no upgrader would be required for the ore slurry (for lower grade ore, non-DSO, at BH, BB, BT, etc) for feeding the Gas Super Converter. Bet that the total cost of KWG plan with the Gas Super Converter would be a lot cheaper to build and to operate than CLF's BT plan.

- The electric arc smelter would require some 300MW (for the size proposed by CLF at Capreol), but if electric power coming from Quebec is cheaper, then companies such as Vale would not close down smelters or move them to Quebec (it cost money to move these plants, and to find qualified people to run them). So, places like Sudbury and Timmins can absorp quite a chunk of power.

- The 5 Nations group was thinking about ~1000MW. But they could probably negociate some good rates for a range of power blocks ranging from 200MW to 1000MW. Perhaps, starting at 3.0 cents/KWh for 200MW and some 2.5 cents/KWH for 1000MW. I am making these rates up, but it was based on a quick check at the rate Hydro Quebec is charging large power consumers (some 3.3 cents/KWh?)

There is a saying: You build and they will come.

Also, the 5 Nations group should consider building this power transmission corridor under the 3P program. This is just like music to Minister Rickford's (and the PM's) ears.

Frank would be cunning/flexible enough to create a win-win situation for everyone.

goldhunter