Building roads to resources a priority, says NWT premier

Mining is the largest industrial sector in the Northwest Territories (NWT), and building transportation and other important infrastructure is the key to unlocking its potential, NWT Premier Bob McLeod said at a symposium in Toronto on Aug. 6.

“We have long understood that stranded resources represent significant lost opportunity for economic development,” McLeod said in prepared remarks at the infrastructure summit of Canada’s premiers hosted by Ontario Premier Kathleen Wynne. “Without dependable, all-weather connections, the huge base metal and mineral potential in the Northwest Territories will remain locked in place.”

On the sidelines of the conference the premier told The Northern Miner that he expects seven new mines will be built in the NWT between now and 2020, but emphasized infrastructure must be built to help support development in the north.

In addition to diamonds and base and precious metals, the Northwest Territories has conventional and non-conventional oil and gas potential in the Mackenzie Valley and Beaufort Delta, he noted.

McLeod believes that one of the most important steps his government must take is to build a $2-billion highway system through the Mackenzie Valley linking the rest of Canada to Tuktoyaktuk, a small community on the Arctic Ocean.

In January, the premier and Prime Minister Stephen Harper attended a groundbreaking ceremony marking the start of construction on the northernmost part of the all-weather highway linking Inuvik to Tuktoyaktuk.

McLeod estimates that this 140 km segment of road alone will contribute $135 million to the Northwest Territories’ growth domestic product, allowing goods to be shipped year-round by road and help support oil and gas exploration and development activities in the Beaufort Sea.

The federal government is footing $200 million of the $300-million bill, with the government of the Northwest Territories coming up with the rest. 

The Inuvik to Tuktoyaktuk part of the highway will be built over four straight winters.

In the meantime, McLeod and his government is pushing ahead with plans for the southern segment of the highway from Wrigley to Norman Wells — a region that has been a petroleum producer for more than 80 years, and is poised to play a greater role in supplying quality crude oil to southern markets.

“The time is right to invest in additional year-round access to the promising new resource-development opportunities in the central Mackenzie Valley,” he told the forum.

The Mackenzie Valley Highway will cross five land-claim areas, not all of which are settled. But McLeod explained that part of his government’s success so far has been the partnerships it formed early with each aboriginal land-claim organization so that they could lead, develop and manage the sections of road within their regions.

Giving the lead role to aboriginal groups resulted in five aboriginal governments, six community governments and the government of the Northwest Territories “working together to develop the project from the beginning,” he explained during his talk, adding that “major issues were resolved through collaboration before the project was even submitted for environmental review.”

McLeod said in an interview that he believes the Northwest Territories can act as a role model for other governments in the country when it comes to working in partnership with aboriginal groups.

“We think the NWT can show the rest of Canada how to do business with aboriginal governments, and show the way in terms of negotiating land claims and government agreements,” he said. “We can show that we are a good example of how things can happen if people work together.”

McLeod described the NWT as being “ahead of the curve,” and said that when the provincial government negotiated the devolution of power over natural resources from the federal government earlier this year, aboriginal governments were its partners in those discussions.

“Of course money talks,” he conceded. “We’ve agreed that 25% of the resource revenues we collect we will co-share with our Aboriginal government partners.”

Mining companies with non-diamond interests in the Northwest Territories include Canadian Zinc (TSX: CZN), Tamerlane Ventures (TSXV: TAM.H; US-OTC: TMLVF), Avalon Rare Metals (TSX: AVL; NYSE-MKT: AVL) and TerraX Minerals (TSXV: TXR; US-OTC: TRXXF).

Canadian Zinc owns the fully permitted zinc–lead–silver Prairie Creek project in the Mackenzie Mountains. Tamerlane owns the zinc–lead Pine Point project; Avalon, the Nechalacho rare earth element project at Thor Lake; and TerraX, the Northbelt and Walsh Lake properties just outside of Yellowknife.