Fednav sends nickel through the Northwest Passage

On Sept. 19 the MV Nunavik embarked on a historic 29-day journey from Deception Bay in Quebec’s far north to deliver 21,000 tonnes of nickel concentrate to Bayuquan, in China’s Liaoning province.

The voyage is the first unescorted commercial trip through the Northwest Passage, according to Montreal-based shipping firm Fednav, which owns the 31,700-tonne icebreaker.

Compared to reaching China via the Panama Canal, the Northwest Passage offers a 40% reduction in distance and time, cutting 9,400 km and 20 days from the trip. While those savings are significant, the shortcut is rarely taken.

“September and the beginning of October is the only time that you can use the Northwest Passage,” Fednav’s director of government affairs and regulatory compliance Marc Gagnon explains in an interview.

Even during this shipping window, he says, the lack of coast guards and the difficulty of navigating the passage make it extra risky. In Gagnon’s estimation, the arctic route won’t see more traffic in the short or even medium term. “This won’t happen every year. We don’t expect it to happen often.”

He says it was an extraordinary coincidence that arctic cargo was sold to China at the right time of year.

Gagnon adds that the past winter’s severity has made the waters especially difficult, which means there will be more icebergs. “We wouldn’t use a regular ship to go through the Northwest Passage this year — it would be too dangerous,” he says. “With the icebreaker we have, we’re going to be OK.”

As a “Polar Class 4” icebreaker, the MV Nunavik is capable of breaking through thick sea ice. But the vessel likely won’t encounter solid ice, or anything that rivals its regular job, which is to navigate Deception Bay year-round, Gagnon says.

It will take four days to travel the 1,700 km Northwest Passage from Lancaster Sound to the Beaufort Sea.

The ship will be aided from shore by Fednav’s ice-navigation support team and employ cutting-edge technology on-board, including real-time satellite imagery and intelligence gathered by reconnaissance drones.

From a regulatory standpoint Gagnon says traversing the Northwest Passage is relatively painless and inexpensive. There are no fees and few restrictions, but an Arctic Pollution Prevention Certificate is required from Transport Canada before embarking.

This journey is only the second commercial cargo ship to travel through the entire Northwest Passage — the first was an escorted voyage last year, he says. Gagnon estimates there have been 200 non-commercial trips through the route, completed by coast guard icebreakers and research vessels.

Fednav operates 75 ships worldwide, three of which are employed full-time in the Arctic, moving 2 million tonnes of material per year from four mines: Vale’s (NYSE: VALE) Voisey’s Bay nickel-cobalt-copper mine in northern Labrador; Teck Resources’ (TSX: TCK.B; NYSE: TCK) Red Dog zinc mine in northwest Alaska; Glencore’s (LSE: GLEN) Raglan nickel-copper mine in Quebec’s Ungava region; and Jilin Jien Nickel Industry’s Nunavik nickel-copper mine, also in Ungava, which yielded the nickel going through the Northwest Passage.

China-based Jilin Jien acquired 75% of the Nunavik project via the hostile takeover of Canadian Royalties in 2009. It bought the remaining 25% by snapping up Goldbrook Ventures with a friendly offer in 2012.

The Shanghai-listed firm has invested $1 billion to develop the Nunavik mine and appointed Toronto-based Forbes & Manhattan to manage the operation through to production, according to its Canadian subsidiary’s last press release in November 2013. That same press release announced the company’s first copper-concentrate shipment from the mine.

Fednav says the miner expects to produce 20,000 tonnes per year of nickel and copper in concentrate.

At press time the MV Nunavik was in Baffin Bay, preparing to enter the Northwest Passage through Lancaster Sound. Visit www.fednav.com/en/voyage-nunavik to track the journey and read daily log posts from the ship.