New Inuit benefit agreement worth $1B over life of Mary River Mine

Baffinland Iron Mines Corporation and the Qikiqtani Inuit Association have a new agreement for Inuit oversight of the Mary River Mine. Announced Monday, the Inuit Certainty Agreement was signed on June 16. 

Baffinland's president says the agreement, which is meant to give more authority to Inuit over the environmental impacts of Mary River, will be worth more than $1 billion over the life of the iron ore mine.  

"When you look at the mine, its assets, the iron ore deposit, it's over a billion dollar improvement into the current royalty environment, over the life of the mine, as we continue to develop the resource," said Baffinland's president and CEO Brian Penney. 

The Inuit Certainty Agreement has been in the works since an environmental review of the mine's production and rail expansion ended abruptly last fall. Negotiations on the agreement officially began earlier this spring, says PJ Akeeagok, president of the Qikiqtani Inuit Association.

The new, legally binding agreement clears up most technical concerns that previously left the Baffin Inuit organization unable to support the Nunavut Impact Review Board's hearing for the phase-two expansion, which would increase production at Mary River.  

"[The agreement] provides us a roadmap to resolve a lot of our outstanding issues," Akeeagok said. "The concerns that we've heard in terms of the communities saying that their voices need to have weight, need to be able to influence what they are experiencing." 

The agreement is focused on environmental protection, and lays out mechanisms for making sure Inuit have a say in environmental monitoring, he said. 

It promises that an Inuit stewardship program will expand to all communities impacted by the mine. These Nauttiqsuqtiit Inuit Stewards will monitor the land and water and report to a committee that will be able to tell the mine when something is wrong. 

This information will be used in the mine's adaptive environmental management plan, a living document that will be informed by Inuit Qaujimajatuqangit (Inuit knowledge). 

"These are unprecedented advancements for any Indigenous organization to obtain in terms of oversight and the level of engagement," Akeeagok said. "It puts Inuit in the forefront in terms of Inuit-led independent monitoring."

A country food study will also be led by Inuit in Pond Inlet, Nunavut, to gather baseline data for use in future environmental decision-making between Inuit and the mining company. 

The Mittimatalik Hunters and Trappers Organization will be given a one-time payment of $1.3 million to offset past interruptions to harvesting. 

Penney said the new agreement is meant to give communities the confidence they need to allow the mine's phase-two production and rail expansion to go ahead. 

"From an environmental protection perspective Inuit now have a say in how we operate, such that if we are doing something that impacts the environment, they not only are monitoring and can evaluate it, they also have a say in how we are going to remedy that situation," Penney said.   

These new supports will be paid for by Baffinland directly, or through mining royalties paid to the Qikiqtani Inuit Association. 

Benefits come after rail expansion

Most of the benefits rely on the production expansion going ahead, because the Mary River Mine can only be profitable over the long-term if a railway is built to replace its current trucking operation, Penney said. 

"The funding required to execute on it requires that level of financial security that Baffinland only receives through a railway operation," he said.  

The funding required to execute on it requires that level of financial security that Baffinland only receives through a railway operation.- Brian Penney, Baffinland president

The Nunavut Impact Review Board's environmental hearing for the Mary River expansion continues to be postponed because of COVID-19. Penney said he has no indication now as to when the hearings will happen. 

With this new agreement signed, Akeeagok says the Qikiqtani Inuit Association is comfortable moving ahead with that process, when the pandemic allows for it.  

He said the agreement does not mean that all Inuit are in favour of the mine's expansion. Hamlets and community harvester groups will still have their own say in the review. 

Mining royalties for Inuit would more than double

Starting immediately, royalties paid to the Qikiqtani Inuit Association will increase from 1.19 per cent to 1.5 per cent. 

If the expansion goes ahead, royalties will gradually increase to three per cent over the next five years.  

Up front milestone payments that add up to $45 million will also be paid over a five year period, if the expansion happens. 

For employment, Baffinland would pay penalties if it doesn't hire enough Inuit, or if Inuit-owned companies are not growing because of the mine. The Qikiqtani Inuit Association will hold a $10 million bond to draw those penalties from.

Penney said training funds will increase recruitment and retention of Inuit employees. Baffinland has already promised $10 million toward a training centre in Pond Inlet. 

"We don't anticipate having to pay penalties," he said. "We want to be transparent, we want to be held accountable if we don't deliver on these. But we are building systems and plans because we're not interested in paying penalties, we're interested in employing Inuit."

Inuit employed by Baffinland would also start receiving a daily childcare subsidy for each child under the age of 14. The mine is also committing up to $3 million per community for daycares. 

New benefits will be written into the Mary River Inuit Impact Benefit Agreement between Baffinland and the Qikiqtani Inuit Association, and presented at the regional Inuit organizations annual general meeting this fall. 

The Inuit association says it will launch videos in both languages over the summer explaining the benefits within the certainty agreement.