Mining the Land: the resource industry in Nunavut

Mining brings challenges but also immense opportunities to the North

A couple of weeks ago, I traveled to the bustling metropolis of Iqaluit (population: 7,000 or so) for the Nunavut Mining Symposium. The Symposium is an annual gathering of mining industry stakeholders that has been taking place in Nunavut for 17 years (longer than there has been a Nunavut), where representatives from government, agencies, organizations, and business get together to discuss the mining industry, projects, and policy.

It’s hard to overstate the importance of the mining sector in Nunavut. Nunavut is a rich land in many ways, with a diversity of beautiful landscapes and abundant wildlife. But most of these resources do not easily translate to economic growth and prosperity. Nunavut has no timber resources, few exports, little manufacturing, and a very small population to serve. So the only major source of potential wealth lies under the ground.

Currently, there is only one operating mine in Nunavut, Agnico-Eagle Ltd’s gold mine at Meadowbank, about 120 kilometres north of Baker Lake. But there are several major projects underway, including Areva’s Kiggavik Project to the west of Baker Lake, and Baffinland Iron Mines Corporation’s Mary River Project on northern Baffin Island. Many junior companies are spread out across the territory, exploring for gold, uranium, silver, base metals, and so on.

A dramatic impact

The Symposium covered a lot of topics, but one presentation that stood out was by Francois Picotte, titled “Mineral Exploration & Mining: Big Business in Nunavut.” Picotte is the Government of Nunavut Senior Economist in the Department of Economic Development and Transportation, and the numbers he presented were eye-opening, even for me.

For example, investment in mining in Nunavut averaged less than $250 million until 2006, when Agnico-Eagle came on the scene. Since then, it has averaged between $450 million and $650 million – except for 2008, when the construction of the Meadowbank mine pushed it well over $1 billion. When you consider that this is new money in the territory and a big portion (although not necessarily the biggest) goes to local business contracts, royalties, and wages, the impact of this one project is huge. Nunavut is a big land with a small population and a small economy, so it’s no real surprise that major projects, such as Agnico-Eagle’s Meadowbank mine, can have an economic impact that seems out of proportion.

Consider too that mining contributed around 5% of Nunavut’s GDP – until 2009, when Meadowbank went into production. Now mining contributes almost 35% of Nunavut’s GDP, an increase overwhelmingly due to the production of gold at Meadowbank.

The impact that this single mining operation has had in Nunavut, especially on communities in the Kivalliq region such as Arviat, is huge, and most of us in the economic development field realize that in terms of job and business growth, mining may not be the only game in town, but it is by far the biggest and most important. The largest part of my job has been focused on training and employment for the mining industry, to make sure that people from Arviat have a fair chance at benefiting from resource development.

Presentations delivered at the 2013 Nunavut Mining Symposium are available online (including mine on training), and make interesting reading, and give an idea of the importance and reach of mining. Presentations cover geology, policy, historical methods of camp supply, community impacts, training initiatives, alternative power supply, and sport programs. There isn’t any aspect of life in Nunavut that isn’t somehow impacted by the mining.

Concerns, challenges and controversy

Mining is not without controversy, of course. The land is sacred to the Inuit people, and while many are cautiously in favour of resource development, there are many questions and concerns about environmental impacts, both immediate and long term. How will mining affect caribou or muskox populations, or access to traditional hunting grounds? How will it affect the water? How can mining companies be held to commitments to clean up their projects and return the land to its natural state when their mines are exhausted? For projects involving uranium, the issue of end use has been raised: how can we ensure uranium from Nunavut will only be used for peaceful purposes?

The other major consideration is that of local benefits. Under the terms of the Nunavut Land Claims Agreement, Inuit are supposed to be the primary beneficiaries of resource development in Nunavut. While many Inuit have benefited from the industry in terms of employment, business opportunities, and industry investment in communities, many still feel that far too many royalties, profits, and wages are flowing south with too little remaining in Nunavut. Considering that the major companies are southern-owned, and that the majority of labour, especially skilled and professional labour, comes from the south, that criticism is not unfounded.

In my experience most mining companies have made genuine efforts to hire locally, contract Nunavut businesses, and provide training to Inuit people. But a lack of skilled labour and capital in the territory present real challenges to ensuring that the benefits of resource development in Nunavut stay in Nunavut. There is a lot of work to be done to ensure that the people of Nunavut are engaged and are the primary beneficiaries of the mining industry in Nunavut. But when you consider that just one more project the size of the Meadowbank gold mine could effectively increase the territory’s GDP by 25% and cut the unemployment rate in half, the importance of that work is clear.

In terms of Nunavut’s economy, mining is definitely the biggest game in town, and the people of Nunavut have little choice but to play. But the people of Nunavut have to be the ones to set the rules.

The views and opinions in this column are those of the author alone, and are not necessarily those of the Hamlet of Arviat, Government of Nunavut, any of their departments or agencies, or anybody else.

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