SOMBA K'E/YELLOWKNIFE - In his Jan. 12 letter to Premier Floyd Roland, Avalon Rare Metals Inc. president and CEO Don Bubar referred to Fortune Minerals as another large industrial consumer of electricity in the North having issues with power availability.

Last year, Fortune announced plans to build a processing plant in Saskatchewan for ore from its NICO gold-cobalt-bismuth-copper project, about 50 km north of Whati.

"There are a lot of reasons for that decision, but one of the primary reasons was availability of reasonably-priced electricity," said Fortune president Robin Goad, adding other concerns included lack of infrastructure and roads.

Goad also said the Tlicho Government is happy the processing plant will not be on its land, because of concerns about chemicals such as cyanide and acid.

The NICO project is about 22 km from the Snare hydroelectric system.

Goad said Fortune had been in contact with the Northwest Territories Power Corporation about more power for both a mine and processing plant from an expanded Snare facility.

"That never happened," he said, adding the power would have cost 11 cents per kilowatt hour.

Now, the mine, which is due to open in 2012, will run on diesel-generated electricity at a cost of 25 cents per kilowatt hour. In Saskatchewan, the company will pay 5.7 cents per kilowatt hour to power its processing facility.

Goad said locating the processing facility in Saskatchewan will actually mean more jobs for Northerners. That's because such a plant requires specialized workers unavailable in the North.

Moving the ore part of the way to Saskatchewan by truck will employ more drivers.