A review by the Bank of Nova Scotia of the then yet-to-be-built Westray coal project identified a number of financial risks associated with the mining project but apparently no safety concerns.
A methane gas explosion at the Plymouth, N.S., mine site in May led to the death of 26 Westray miners.
A letter dated Sept. 14, 1990, to the office of the Nova Scotia industry minister summarizing the findings of the bank’s “due diligence” review of the initiative says the risks were the sort “typical of mining projects in general.”
Risks foreseen by the bank concerned matters such as the amount of proven coal reserves at the Plymouth mine site, projected production costs and revenue flow.
Each of the risks was “found to be acceptable” based on available information about the mine project, the letter says.
The federal government in 1990 agreed to support the mine by guaranteeing $85 million of a $100-million loan from the bank and providing up to $8.75 million in interest subsidies. The provincial government had provided $12 million in loans.
The letter was among more than 40 documents, totalling hundreds of pages, released recently by the federal government.
— From news wire sources
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