Green light on expansion of Baffinland's Mary River mine 'critical,' company says

The next five days of hearings under the Nunavut Impact Review Board could prove critical to the future of the Mary River iron mine.

Baffinland, which owns the mine, is looking to come out of the review in Iqaluit with a positive recommendation for its Phase 2 expansion. This could lead to the federal northern affairs minister to grant a new project certificate to the mine, with conditions.

If not, the Mary River mine could be shuttered, put into care and maintenance, said Megan Lord-Hoyle, Baffinland Iron Mines Corp.'s vice-president of sustainable development, who spent Monday fending off technical questions from the NIRB and intervenors during the first day of the six days of meetings in Iqaluit.

"This process has been unexpectedly long," Lord-Hoyle told CBC, referring to the postponements and cancellations of the key review hearings on the mine's expansion, most recently last April due to COVID-19 in Iqaluit.

"We will be looking at moving into a care and maintenance scenario," Lord-Hoyle told the meeting if the expansion stalls at the permitting stage.

More ore needed to fund growth

The goal of the Phase 2 expansion is to up the mine's production to 12 million tonnes of iron ore a year and by doing that, lure investors keen to sink up to $1.3 billion in the mine's development. Once production of 12 million tonnes is approved, Baffinland said it would ultimately seek to increase it to 30 millions tonnes.

For the proposed expansion, shareholders would be asked to invest between $1.2 billion and $1.3 billion, according to a credit report on Baffinland, prepared by Moody's Investors Service.

The growth involves the construction of a 110-kilometre railway, a new port at Steensby Inlet and a growth in shipping to a maximum of 168 huge iron-ore carriers a year.

That would give Baffinland a "competitive advantage" in the world market, Lord-Hoyle said, and give the company the leverage it needs to raise the money and "unlock the whole project."

The mine would then become "a world-class operation."

Communities speak

But there are unresolved issues, which will be raised during the community roundtable discussions slated to run until Saturday morning.

This will see members of the communities of Pond Inlet, Arctic Bay, Sanirajak, Igloolik and Clyde River, raising their concerns about the project to NIRB and Baffinland's team led by Iqaluit-raised Udlu Hanson, now a vice-president at the mining company.

Meanwhile, Baffinland continues to emphasize the benefits to communities on sheets distributed in Inuktitut and English: for example in Pond Inlet, which, unlike Arctic Bay, Grise Fiord and Sanirajak, is not supportive of the project, it lists $16 million from the mine in wages since 2015, with 46 employees out of 286 employees at the mine and $15 million awarded to Inuit firms based in Pond Inlet.

Phase 2 benefits for the community are also touted: additional jobs, a community daycare, a Baffinland office, $10-million training centre and community garage as well as a continuing flow of money to various community funds and programs through the Inuit Impact and Benefit agreements.

The benefits also include $10,000 for every additional tanker that passes by the community, which could give $1.6 million a year to the community.

Opposition around narwhal, community benefits

But there are disagreements, which became evident already on Monday, such as the threshold used by Baffinland to gauge the impact of shipping noise on narwhal.

Fisheries and Oceans Canada questioned the use of other species of whales to evaluate the impact of the noise of shipping on narwhal, which need "quiet time," said Gabriel Bernard-Lacaille, a senior fisheries protection biologist.

There was also tension from the community of Pond Inlet, which has a population of about 1,800 and sits the closest to the mine, but has not come out in support of the expansion.

Underlying misunderstandings also remain about the role of traditional knowledge of Inuit Qaujimajatuqangit. An Iqaluit elder speaking Monday said he doesn't want IQ to end up like toy harpoons hung on the wall, for show. Other speakers grappled with how to express what that IQ is, describing it as a living, breathing view of the environment and the world.

Lord-Hoyle said Inuit involvement on various monitoring committees should allow IQ a strong voice as the mine grows.

On Tuesday, the community roundtable portion of the hearings gets underway.

But Jerry Natanine, who is representing the Hamlet of Clyde River, told CBC he doesn't think the proposed expansion should move ahead. He was unimpressed by the responses given by Baffinland to technical questions on Monday.

"Every time the opponents gets knocked down, I am happy," Natanine said, adding that the royalties paid by Baffinland to Inuit are too low.