THE people of Newfoundland, surviving on the rocky eastern tip of Canada, are accustomed to economic setbacks. But three shafts of sunshine have recently cut through the Atlantic mists. An oil consortium is going ahead with a third large offshore field east of the island. Newfoundland has won a battle with Nova Scotia for the lion's share of oil and gas deposits in the Laurentian sub-basin to the south. Best of all, the province has signed agreements to exploit one of the world's richest nickel deposits, at Voisey's Bay in Labrador.

For decades, young Newfoundlanders have migrated to Toronto as the province's economy languished. Desperate to halt the exodus, the province's political leaders struck some bad deals: a hydroelectric scheme from which neighbouring Quebec took the profit, an oil refinery that rusted into disuse, fish plants that collapsed when the cod disappeared a decade ago, and huge hydroponic greenhouses which grew cucumbers at a loss.

A turning point of sorts came in 1997 when oil began to flow from the Hibernia field, 200 miles (320 km) south-east of St John's, the province's capital. A second field nearby has made Newfoundland Canada's second oil producer, after Alberta. In March, Husky Energy, together with state-backed PetroCanada, agreed to invest more than C$4 billion ($2.5 billion) over 15 years in White Rose, a third field. But critics say that the oil wealth hardly flows beyond St John's. Over the past five years, the province's population has fallen by 7% (to 513,000). Outside the capital, one out of five workers is unemployed.

The provincial government hopes that the Voisey's Bay nickel project will stop the rot. In June, after years of talks, the province and two native peoples (the Inuit and the Innu) at last ratified a contract to develop the mine with Inco, a mining firm. It had paid C$4.3 billion for the property in 1996. But, when nickel prices tumbled, Inco was reluctant to commit itself to building a smelter at Argentia, a former American naval base near St John's, as the provincial government wanted.

Now a deal has been struck: nickel mining will start at an open-pit site in 2006, while a pilot processing plant is built at Argentia. Newfoundland will allow concentrate to be shipped to smelters in central Canada in the early years, provided that ore is imported later from Inco's other mines to be processed in a full-scale plant at Argentia (to which the federal government will contribute C$150m). Later, too, an underground mine will be built.

Over the next 30 years, Voisey's Bay should provide hundreds of permanent jobs and some C$11 billion in revenue for the provincial government. The province in turn will pay C$255m to the 5,000 Inuit, who claim the land around the mine. They and the 1,500 Innu will take a percentage of the mine's profits. Newfoundlanders will hope that, this time, they have struck lasting wealth.