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Bernard Coulombe, CEO of Mine Jeffrey Asbestos Mine, poses near his mine's open pit in the town of Asbestos, Quebec, on June 30, 2011. Coulombe said his company has “taken all necessary measures” to ensure their product is safe.Francis Vachon/The Globe and Mail

Canada's beleaguered asbestos industry, which has been a target of activists who link its product to cancer, has been given a $58-million lease on life by the Quebec government.

While the industry has appeared on the brink of collapse, Friday's long-rumoured provincial loan will cover more than two-thirds of the cost of renovating and reopening the Jeffrey Mine in Asbestos, Que. — a move that could keep production going for another 20 years.

Critics here and abroad have called it immoral for Canada to be exporting the substance to developing countries where safety standards are suspect.

One of the last two remaining asbestos facilities in Canada, Jeffrey Mine suspended production last year due to financial problems.

The other mine, Lac d'amiante du Canada in nearby Thetford Mines, shut down shortly afterward but some proponents hope it can be revived as well.

At its peak, the once-mighty Canadian asbestos industry helped create entire towns and dominated international production of the mineral used in fireproofing and insulation.

The deal to refurbish Jeffrey Mine will see private investors, led by Balcorp Ltd., kick in another $25-million. The owners will have to provide royalties along with annual fees that, over time, will see $7.5-million put aside to diversify the region's economy.

The announcement was expected. Speculation about the reopening has drawn attention in international media including the New York Times, which last year ran a long feature on, "a town called Asbestos."

Balcorp president Baljit Chadha indicated last year he was close to securing the necessary funding from an international consortium of investors.

"This is excellent news for the city of Asbestos and for the region," said Yvon Vallieres, the local MNA and cabinet minister who is retiring from provincial politics.

"The reopening of the mine will not only create 425 full-time jobs, especially for young people, but it will also contribute to development in Asbestos, a one-industry town."

He cited predictions that worldwide demand for asbestos would increase — especially in India — while the supply would drop.

He said an external audit with a respected firm would monitor whether the material was being handled safely by Jeffrey's foreign customers.

The announcement came as rumours swirled about a possible provincial election in September. Mr. Vallieres, the long-time Liberal legislature member for the area, has announced he is not running.

Industry proponents insist asbestos can be used safely if it is handled properly and say the chrysotile asbestos manufactured at the Jeffrey Mine is not as dangerous as other forms of the material.

But not everyone hailed the news.

Dr. Yves Bonnier Viger, president of an association of Quebec medical specialists in public health, criticized the move.

"It makes me very sad," said Dr. Viger.

"It shows an insensitivity to the scientific data and a lack of respect for the health and well-being of the population."

The doctor said he and his colleagues will lobby the government to reverse its decision.

Attempts to restart the Jeffrey Mine have been pummelled by an international anti-asbestos campaign led by physicians, activists and asbestos victims who insist the material is linked to cancer.

A senior official of the World Health Organization says it stands by its estimate that asbestos-related diseases, such as certain forms of lung cancer, kill more than 107,000 people around the world each year. The figure relates specifically to people exposed to asbestos fibres at work.

Ivan Ivanov, a team leader in WHO's department of public health and the environment, said earlier this year the estimate in based on data from published scientific research.

However, Bernard Coulombe, the president of Jeffrey Mine, has challenged the data, calling it an exaggeration based on unfounded evidence.

He said in a news release Friday that the product produced at Jeffrey will be used safely — principally as a component in cement for infrastructure like aqueducts, wells, and buildings that are mostly agricultural.

The news release noted that the Quebec government recently signed an agreement with India on the safe use of mining materials.

"We have taken all necessary measures to ensure that chrysotile be used safely by all our clients," Coulombe said.

-With files by Nelson Wyatt and Sylvain Larocque