According to reports from The Conference Board of Canada, GDP in the Canadian Territories in the North is expected to grow by 3.6 % this year, and then 5.4 % in 2013. While this is not as strong as was originally predicted, the North will still outperform the rest of the country. Most economists agree that the primary reason for this strength in numbers in Canada’s North is the mining industry.
All three territories have either existing or planned mining projects that can or will rival production anywhere in the world.
According to the Yukon Chamber of Mines, exploration expenditures in that Territory exceeded $300 million in 2011. Mineral production was estimated to have reached $485 million (compared to $46 million in 2006). The Chamber also advised that the sector directly employs 1,000 to 1,500 and that Yukon’s three top operating mines directly employ some 750 at the mine sites alone.
In Nunavut, there is tremendous activity. The proposed Mary River project on northern Baffin Island – if it proceeds – would be the North’s largest industrial development to date. The mine, which would be located 160 kms. south of Pond Inlet, would cover 17,000 hectares and would cost in the order of $4 billion to build. The mine would also require the construction of a 150 km railway, and a port to be built at Steensby Inlet. From there, a purpose-built fleet of approximately 10 icebreaking freighters would transport iron ore year round. The mine and related developments would require 3,000 workers for the building process, and then 950 people to run the operations. There are a number of issues to be discussed and resolved before this project could proceed, but the significant volume of jobs and investment dollars at stake for the region will make this an interesting conversation.
In Bathurst Inlet, MMG has submitted a proposal for the Izok Corridor project (comprising the Izok Lake and High Lake deposits) which is expected to produce in the area of 180,000 tonnes of zinc concentrate and 50,000 tonnes of copper concentrate per year once in production. While the operating Meadowbank mine may be slowing down somewhat, it is still estimated to be producing around 300,000 ounces of gold per year.
In the NWT, Rio Tinto and Harry Winston Diamond Corporation are working on making possible the significant life extension of the Diavik Diamond Mine by development of the A-21 pipe. This project could cost around $514 million, and would extend the life of the mine until 2023. The Ekati mine is currently expected to produce past 2018, and the Snap Lake mine to approximately 2028.
Whether the projects are advanced or in planning stages, some Northern communities have mixed feelings regarding this development. While there is no doubt that mines bring jobs, revenue and investment into Northern communities, they can also unwittingly bring challenges. According to the RCMP, more people can mean more crime and dysfunction in a community. An influx of residents also puts pressure on community infrastructure (housing, education, healthcare, etc.). Given these potential challenges, environmental assessments and impact benefit agreements are critical, to ensure that development is not occurring at the irreparable cost of the environment, communities or cultures.
It is our experience, assisting with major mining projects in Canada’s North, that the two considerations that tend to make for the long-term success of such projects are mostly at the front end: due diligence (time on the ground) and consultation. Projects must be carefully considered from regulatory, environmental assessment and community perspectives. They must also consider appropriate consultation requirements and develop mutually beneficial impact benefit agreements. When this is done well, implementation runs far more smoothly and the benefits of projects outweigh some of the inherent challenges that a sudden influx of prosperity brings to a region.