The spring of 1999 will be bittersweet for the residents of Nunavut. Although Canada’s newest territory will celebrate official self-governance, its status as one of the poorest regions in Canada is certain to persist.
For change to occur, say representatives of both Nunavut and the mining industry, the region must commit to building the infrastructure necessary to attract investment. Only then will the private sector — especially the mining industry — be motivated to nurture opportunities there.
“There is no other kind of activity that is going to generate the amount of work and the amount of business that will be created by mining,” says Charles Lyall, president of Kitikmeot Corp., an organization responsible for promoting economic development in the Kitikmeot region of Nunavut’s southwest. “If the infrastructure does not go ahead, we will see a continuation of the welfare state, suicides, joblessness and the feeling of desperation.”
Nunavut gains official status on April 1, when 2 million sq. km of the eastern Arctic separates from the Northwest Territories and becomes a self-governing territory.
The region has already elected a 19-member legislature to represent a population of 27,000 and approved a $620-million annual budget financed mainly by compensation from the federal government. Tourism, mining and the traditional occupations of hunting, trapping, fishing and arts and crafts provide additional revenue.
But the statistics are bleak. More than 40% of the territory’s adult population have less than a grade nine education, and about one-third rely on some form of social assistance. Suicide, infant death and crime rates are all much higher than in the south.
To make matters worse, the few mines that do operate in Nunavut are closing. The 16-year-old Lupin gold mine closed last year, while the Polaris and Nanasivik zinc mines are both long in the tooth.
The prognosis for exploration is not much better. Many mining companies that might otherwise be interested in exploring the region are staying away simply because of the uncertainty associated with land tenure, taxation and other regulatory issues under the new regime. Today’s low metal prices are another deterrent.
“The mining industry is always afraid of the unknown,” says Glen Dickson, president of
Under the land claims agreement that spawned the new territory, the Inuit won title to 350,000 sq. km of land and mineral rights to about 10% of that total.
Many Nunavut leaders now want to team up with mining companies to develop the land. They view mining as a chance to break loose from the cycle of despair that plagues their citizens and give the next generation (half the population is under 20) a reason to stay in the region and carry on Inuit traditions.
“We get all kinds of kids that are starting to go through high school here because there are now local high schools,” says Lyall. “We need to have something for them to go to.”
A proposal to build a port with an associated network of roads is vital to achieving this goal, he says.
At the moment, Nunavut has virtually no infrastructure. To develop and operate most of the region’s many mineral deposits, companies would have to ship fuel and other supplies from central Alberta at great expense.
The proposal calls for development of a deep-water port at Bathurst Inlet, about 160 km from the existing winter road system that links Lupin and the Ekati dimaond mine to Yellowknife. A connecting road network could improve the economics of developing several currently subeconomic mineral deposits that dot the Kitikmeot landscape, including the Izok Lake, Hackett River, Gondor and Hood River zinc deposits and the Boston, George Lake, Goose Lake and Ulu gold deposits.
Results of a recent survey of Bathurst Inlet suggest that the port could handle deep-sea, ice-class vessels. Construction of the port and gravel road to Contwoyto Lake is expected to cost about $130 million and generate 1,000 jobs.
Although there is support for the proposal, several thorny issues, such as disruption of the caribou migration, have yet to be resolved.
“There are a lot of concerns about the environment, caribou migration and calving,” says Lyall. “But these disturbances can be minimized.”
He also says it will likely be five years before any construction gets under way.
The immediate prospects are somewhat brighter in eastern Nunavut (Kivalliq), which hosts both the Meliadine West and Meadowbank gold deposits.
WMC International, the North American unit of Australia’s Western Mining Corp., is collecting data for a final feasibility study on Meliadine West, 20 km north of Rankin Inlet. The deposit has an indicated resource of 9.8 million tonnes
grading 10.5 grams per tonne.
by WMC.
Closer to Baker Lake, Cumberland is awaiting the results of a prefeasibility study on its wholly owned Meadowbank prospect, where a combined open-pit and underground operation could produce 120,000 oz. gold per year at a cash cost of US$156 per oz.
Both projects have ready access to barges on Hudson’s Bay — a relatively inexpensive means of transporting heavy equipment and fuel to the Far North.
Cumberland’s Dickson is enthusiastic about the potential for developing the first mine under the new government. He says that although Nunavut residents expect something in return in the way of education, training and royalties, the conditions for development are not unreasonable.
“We have been pleased about working in Nunavut,” he says. “We get lots of support from the local community [Baker Lake], and our relationship has been successful
so far.”
The Jericho diamond project of
by open-pit methods, of 3.8 million tonnes grading 1.01 carats at an average value of US$60-70
per carat.
If the Meliadine, Meadowbank and Jericho projects do go ahead, they will pave the way for other mining companies to develop mines and, in doing so, provide some economic independence for the residents of this vast, remote territory.
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