Commentary: Investors staying away from provincial government plan
PORT TOWNSEND, Wash. (MarketWatch) — There have been some suspect Canadian mining ventures over the years. But none were probably as sketchy — or as unhealthy — as this one.
The provincial government of Quebec is doggedly trying to lure investors to reopen the Jeffrey Mine in lovely, pitted, Asbestos, Quebec. It was closed last year for financial reasons after a cave-in. Quebec’s leader has been trying to find money to kick-start the mine for over a year, in fact. So far, investors have stayed away. Quelle surprise.
Asbestos, you have to admit, doesn’t have quite the same allure as gold or silver. That’s right, asbestos. The same legally radioactive material that makes litigation-averse governments and businesses here in the U.S. close and clean buildings if even a trace of it is found. The same cancerous mineral that has attorneys trolling for lawsuits on cable-TV on behalf of victims afflicted with mesothelioma, a particularly aggressive form of cancer caused by asbestos exposure.
Asbestos was banned in Europe in 2005. The World Health Organization estimates that more than 107,000 people die each year from chrysotile-related lung cancer, mesothelioma and respiratory diseases from workplace exposure. Chrysotile is the type of asbestos mined in Quebec.
Asbestos, long used in construction for its heat-resistant properties, had been mined in Quebec for 130 years until its two mines shut down last year. But Quebec Premier Jean Charest wants to reopen the Jeffrey mine, despite overwhelming medical evidence of asbestos’ carcinogenic effects: He gave the mine a C$58 million bank-loan guarantee if Montreal investment group Balcorp Group could raise $25 million from investors. So far, no takers.
Even though this seemingly bizarre story has attracted little notice outside Quebec, Canadian Prime Minister Stephen Harper is now under media scrutiny and criticism for appointing Christian Paradis as his Industry Minister. Paradis, who hails from Asbestos, where the Jeffrey mine is located, badly wants it reopened. During last year’s Quebec provincial holiday, Harper showed up in Paradis’ district, in the town of Thetford Mines, where another shuttered asbestos mine is located.
But asbestos, which is mixed with concrete and used to make pipes, doesn’t have a whole lot of friends in its home province these days.
French-language Montreal newspaper La Presse recently carried a hard-hitting investigative series of articles interviewing victims of asbestos who didn’t even work in the mines. Some women may have been exposed from being in a school building, another from washing her miner husband’s clothes. Quebec’s provincial government, reacting to the series, relented and released a secret list of Quebec buildings that contain the carcinogenic mineral.
Quebec’s medical community wants to keep the mine closed, too, not just Charest’s political opposition. “It’s time for Quebec to stop investing in asbestos,” ran a recent Montreal newspaper headline over an opinion piece written by the executive director of the Quebec division of the Canadian Cancer Society.
Even though mine officials insist the Quebec variety of asbestos, chrysotile, is safer, the Cancer Society’s Suzanne Dubois insisted all forms of asbestos cause cancer. Mesothelioma, a cancer of the lung linings, can strike up to 20 years after exposure to asbestos. That explains the legal TV ads we’ve been seeing recently in the U.S.
One opposition politician, Quebec assembly minister Amir Khadir, said at a recent news conference that “a credible source” told him financial institutions have balked at putting up the $25 million in investment capital needed to secure the $58 million government loan.
Khadir told the news conference he’d consulted the V.P. of a major financial institution, “And he said the business plan did not respond to any logical market criteria.” No surprise there.
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