Curragh Resources has received loan guarantees and interest buydowns from the federal government needed before getting the necessary debt financing to bring the Westray coal mine near Stellarton, N.S., into production. The underground project is expected to cost a total of $140 million and employ 240.
Roy Sherwood, acting director of Industry and Technology in Halifax, confirmed that the company has received the federal incentives in the form of a written contract. But he would not confirm the actual figures until Curragh signs the contract.
The company has 60 days to do so.
The incentives are administered by Industry, Science and Technology Canada.
Since the fall of 1989, Curragh has been seeking the incentives, which include an 85% loan guarantee over 15 years and an interest buydown of $8.75 million over four years.
Curragh did not issue a news release to announce a change in material fact because the company is in the process of completing a public financing. That is expected to take another month to complete.
The company has spent about $23 million on site preparation and underground development at the Westray mine and expects to begin producing coal in 1991.
Nova Scotia Power (NSP) is spending $252 million to construct a new 150-MW coal-fired electric generating station about nine kilometres from the mine mouth and plans to begin burning coal from the Westray mine in August, 1991.
In 1987, Curragh Chairman Clifford Frame signed an agreement with NSP to supply 700,000 tonnes of coal per year to the utility over a 15-year period.
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