So long Milne Inlet: After expansion rejection, Baffinland turns to Steensby rail

Baffinland Iron Mines is reviving a plan put on the backburner years ago, to ship ore from its Mary River mine in Nunavut using a railway south to Steensby Inlet.

The announcement follows a decision in November from Northern Affairs Minister Dan Vandal to reject the company's Phase 2 expansion proposal. That plan would have seen a 100-kilometre railway built from the mine north to Milne Inlet. Right now, the company uses a tote road to bring ore to that port.

Baffinland CEO Brian Penney announced the new plan at a conference in Ottawa earlier this month.      

"Our focus over the next 18 months is to begin the transition to a southern railway operation. At this moment — we are passionately working to secure the financing need to get the Steensby Project up and running," Penney said, at the Northern Lights conference and trade show.

"This has been our plan all along and the Phase 2 expansion was a step toward this plan."

The proposal to build a railway south to Steensby Inlet was approved a decade ago when the mine was given the green light. It would have included an all-season deep-water port, and ice-breaking ore carriers travelling through Foxe Basin. 

Baffinland soon changed plans, though — saying it couldn't raise the money to build the Steensby railway — and opted for a road and port at Milne Inlet.

Penney says the railway south to Steensby is about five times more expensive than the one Baffinland had proposed to build to Milne Inlet. 

Now, Penney says, things have changed. He says the company has now demonstrated the size of the resource and the mine's potential lifespan — making it easier to raise capital.

Penney also says the mine's high-grade iron ore requires less processing, and so that makes it vital in light of "the world's need and growing willingness to reduce its carbon footprint."

"While other metals are also vital, green steel is required in virtually every aspect of that shift. And green steel is critically dependent on high grade ore. Which puts Nunavut at the centre of it all."

Baffinland spokesperson Peter Akman said the Steensby plan is already approved under the company's existing project certificate and water licence. He said the company would now need to apply for some additional permits for the railway and port infrastructure at Steensby.

A statement from Minister Vandal's office confirmed the earlier approval of the Steensby plan. 

"The southern route through Steensby Inlet has previously received approval through the appropriate review process and we are encouraged by Baffinland's continued engagement with local communities and Inuit partners," the statement reads.

Lori Idlout, Nunavut's MP, predicts there will be a lot of concern among nearby communities about the new plan. 

She said the rejection of the Phase 2 proposal should have been a signal to Baffinland "that they need to work better with Inuit."

"And obviously with this announcement, it sounds like they're not planning to do that."