Inuit push for infrastructure in Nunavut — Mining symposium aims to ease concerns about regulatory hurdles

Cambridge Bay, N.W.T. — While the new territory of Nunavut (pronounced noon-a-vut) will not gain official status until April 1999, Inuit organizations are already launching programs to attract mining investment.

“Mining will be a cornerstone for economic self-sufficiency,” said Charles Lyall, president of Kitikmeot Corporation, during the third annual Nunavut mining symposium held here in late March.

After Nunavut is carved from the eastern half of the Northwest Territories next year, Inuit leaders intend to pursue some bold infrastructure initiatives aimed at opening up the North to resource development. Cambridge Bay’s mayor, Wilf Wilcox, said the goal will be to provide jobs for young people, who make up more than half Nunavut’s 25,000 residents.

Toward that end, Inuit corporations want to forge partnerships with mining companies to develop lands they were awarded as part of Canada’s largest land-claim settlement. The agreement gives Nunavut Inuit title to 350,000 sq. km of land and mineral rights on 35,257 km of that total, plus a major say in what happens on Crown lands. It includes a political accord for the establishment of a new territory and an elected government to serve both Inuit and non-Inuit citizens.

Inuit leaders say more mines are needed to give Nunavut an economic base and enable it to reduce its dependency on federal transfers from Ottawa. With operations suspended at the Lupin gold mine, Nunavut has only two operating mines — Polaris and Nanisivik in the high Arctic — both nearing the end of their productive lives. Numerous mineral deposits occur in the region, notably the Izok Lake zinc deposit (and neighboring Hood River and Gondor deposits), the Hackett River base-metal deposit, the George Lake gold deposit, the Boston gold project, the Meliadine and Meadowbank gold deposits and various diamond projects.

John Zigarlick, chief executive of Nuna Logistics, said the lack of infrastructure in Nunavut means many of these deposits will remain undeveloped, and that in order to be developed, new discoveries will have to be bigger and richer than those in the South, or will have to have access to tidewater.

“The Nanisivik underground [zinc] mine has half the grade of Izok Lake, which is open pit,” Zigarlick explained. “Yet Izok remains undeveloped [because] it faces a problem known as the ‘Arctic premium’ — the price of fuel. Nanisivik does not buy fuel here; it brings it in as backhaul, which is far cheaper. If we could haul ore out and backhaul fuel, we could get rid of the Arctic premium and many of these deposits would be competitive and commercial.”

Several speakers at the symposium endorsed a study initiated last year to examine the viability of an access road and a deep-water port near the southern end of Bathurst Inlet. The study was funded by several mining companies, the Kitikmeot Inuit Association, the government of the Northwest Territories and a shipping company that owns ice-class vessels.

During the first phase of the study, the Canadian Coast Guard ship Nahidik completed a hydrographic survey showing that ocean-going ships could navigate a channel down the inlet. The second phase will be completed this summer.

The proposed port site is 160 km from the existing winter road system that serves Echo Bay’s Lupin mine and the major diamond developments (Ekati and Diavik) in the region. Currently, fuel and supplies are hauled as far as 2,300 km over rail and ice road from Edmonton. Zigarlick said the proposed port could serve these operations, as well as the advanced George Lake and Izok Lake projects, reducing operating costs. All are within a 300-km radius of Bathurst Inlet.

Not to be outdone, the government of the Northwest Territories released details of a new road initiative dubbed the “Slave Geological Province Transportation Corridor.” The plan, which appears to revive the previous “Roads to Resources” strategy, would link Yellowknife to Bathurst Inlet through a network of winter and all-weather roads and barge portages.

The Kitikmeot Corporation, one of several Inuit organizations in Nunavut, strongly supports the port proposal. The corporation is already partnered with Nuna Logistics, which manages Echo Bay’s winter road system and offers construction and related services.

“Mining companies want to mine resources,” Lyall said. “Most don’t want to, nor can they afford to, build and operate major infrastructure to support their projects. We want to own or control the infrastructure that will support development of the mining industry. We envision owning the roads, ports, ships, fuel storage facilities and power generation facilities.” Lyall said a consortium of Inuit and specialized businesses may be formed to pursue the idea further. “We also envision these infrastructure projects supporting general economic development and lowering the high cost of living most of us face daily in our communities.”

While infrastructure was a topic of widespread interest to mining delegates, several sessions focused on the regulatory regime that is expected to prevail in the new territory of Nunavut.

At first glance, the maze of regulatory bodies set up to review project proposals appears daunting. At present, there is no “one window” process for project reviews, and a project may require more than one authorization based on land (whether Crown or Inuit-owned land) and water jurisdictional responsibilities.

After reviewing the application for completeness, the authorizing agency (or agencies) forwards the project proposal to the Nunavut Planning Commission, which, in turn, may refer the project for screening to a distribution list of co-management boards, designated Inuit organizations, Community Land and Resource Committees (CLARCs), community councils, federal and territorial government departments, relevant wildlife management boards, and possibly certain individuals.

Several industry delegates urged that consideration be given to streamlining the review process, particularly during the early stages of exploration. It also was pointed out that the current system is onerous for both Inuit and non-Inuit prospectors.

“We want one-stop shopping and a fair and transparent system,” said Michael Hine of Rubicon Minerals. Others called the regulatory maze “a bureaucratic nightmare,” with several delegates pointing out that the requirement to inform Inuit organizations of their staking activities might deter exploration on Inuit-owned lands and, consequently, restrict mining companies to Crown land.

“The highest priority is to streamline the permitting process,” said Glen Dickson of Cumberland Resources. “The promotability of our projects is dependent on how the people here promote themselves.”

Michael Vadyik, president of the N.W.T. Chamber of Mines, endorsed the call to streamline the regulatory process in order to stimulate exploration.

“Millions of exploration dollars were brought into the Territories [as a result of the Lac de Gras diamond rush]. Exploration alone can be marketed as a sustainable activity — it worked for Yellowknife.”

Both Inuit and industry delegates called for more geoscience information, particularly in the far North, where gaps in mapping and geophysical information exist. This request was strongly endorsed by delegates from the Baffin Island region, who were anxious to learn more about the potential for major nickel deposits on a belt of rocks that is known to have geological similarities to the Cape Smith belt in Quebec (which hosts the Raglan nickel mine) and the Thompson nickel belt in Manitoba.

At a round table session, Inuit leaders promised to examine the idea of a one-window process, through which a lead agency would ensure that all related boards and agencies were informed of project proposals. At the same time, however, they urged mining companies to keep local communities informed of their activities.

“We want to be involved,” said Joe Kaludjak, president of Sakku Investments.

“We need communication and more joint ventures. We can be more helpful if we know what is going on.”

Another topic of interest and healt
hy debate was Article 26 of the land claims agreement, which governs Inuit Impacts and Benefits Agreements (IIBAs). This article requires major project proponents to negotiate benefits agreements with Inuit if the project is within Inuit-owned lands.

Specifically, it provides the legal and contextual framework for ensuring that the project “adds value to communities and regions affected by development, and that long-lasting relationships are fostered between developers and Inuit.” It applies only to major projects (defined as having capital costs of more than $35 million).

“Because of the newness of the land claim agreement, there is some concern that IIBAs will be just another cost driver imposed by government on an already financially and market-pressured industry,” said Charlie Evalik, president of the Kitikmeot Inuit Association. “There is concern [that] a mining project’s viability may come into question as a result of excessive cost burdens attached to it. Another concern is that IIBAs will lead to an overly complicated set of rules that rigidly define how the ongoing relationship will evolve.”

Evalik said Article 26 sets out “suggestions” for elements of an IIBA and is not “prescriptive” in the sense that an narrow and fixed set of rules must be followed. “There is a great deal of flexibility in negotiating provisions of an IIBA.”

He also pointed out that the objective is an agreement that benefits both parties. “If one party is going to be a significant loser, then no one wins.” While most mining companies recognize that IIBAs are part and parcel of mining anywhere in northern Canada, some delegates bristled at the suggestion that they be should be applied during the exploration and advanced exploration stages. As one delegate later confessed, “I worry about the lack of control and whether I might be pressured to use inappropriate [supplies and services] just because they are Inuit-owned.”

After a candid exchange on the topic, industry delegates were reassured to hear that IIBAs do not apply to exploration projects. They were advised that keeping local communities and other agencies informed of their work plans is in everyone’s interest. It also was suggested that industry should attempt to use local businesses so that benefits from contracting and other activities stay in the North, rather than flow south as they have in the past.

Overall, the exchange of information and ideas that flowed during the 3-day event was viewed as a positive development by all participants. “We cannot have development of mining without open communication and dialogue,” Lyall said. “We are encouraged that most mining companies now recognize that the consultation process in an important component of their project development and approval schedules.”

Several Inuit leaders argued that too much attention was being paid to IIBAs, when it ought to be focused on attracting more exploration dollars by streamlining the regulatory system.

Jerry Ell, president of the Qikiqtaaluk Inuit Corporation in the Baffin Island region, said it has been “scary” for companies to watch the proliferation of new policies governing mining and exploration in Nunavut.

“We want our cake and we want to eat it too,” Ell said. “What we don’t have is the ingredients for the cake. To move mining forward, we need good maps and geophysical surveys, education and prospecting courses. We need policies to encourage exploration, whether on Crown land, Inuit land, surface or subsurface. Our regulatory bodies need clear, concise policies applicable to everyone. It’s nice to talk about impact benefit agreements, but if there are no impacts, there are no benefits.”