Nunatsiaq News
NEWS: Around the Arctic April 14, 2018 - 2:30 pm

After Ottawa denies funding, Nunavut government pulls out of Grays Bay

Kitikmeot Inuit Association now sole proponent of ambitious road-port proposal

JIM BELL
Here's the site on Grays Bay in western Nunavut where the Government of Nunavut and the Nunavut Resource Corp. want to build a port that would be connected to the interior by a 227-kilometre all-weather road. (HANDOUT PHOTO)
Here's the site on Grays Bay in western Nunavut where the Government of Nunavut and the Nunavut Resource Corp. want to build a port that would be connected to the interior by a 227-kilometre all-weather road. (HANDOUT PHOTO)

If the ambitious Grays Bay Road and Port project is ever built, the Kitikmeot Inuit Association will likely have to get the work done on its own.

That’s because the Government of Nunavut will now pull out of the project, following a decision by the federal government to reject a funding proposal that would have covered 75 per cent of the project’s approximately $500-million price tag.

“I have full confidence that the Kitikmeot Inuit Association has the ability and vision to see this project through to its completion,” Joe Savikataaq, the Nunavut minister of Economic Development and Transportation, said yesterday in a terse news release announcing the GN’s pull-out.

The GN and the KIA “jointly agreed” that as of this month, the KIA will become “the sole proponent of the Grays Bay project in future NTCF [National Trade Corridors Fund] submissions,” the GN said.

A KIA-owned subsidiary company, the Nunavut Resource Corp., teamed up with the GN in 2016 to promote the Grays Bay scheme, bragging that it’s a “transformative project with significant national benefit that will help to define northern economic development throughout the 21st century.”

They sought money from the federal government’s National Trade Corridor Fund, which provides $2 billion over 11 years for transportation projects across the country.

But only $400 million of that is dedicated to the three northern territories.

In the Grays Bay proposal, the GN and the KIA pitched a 227-kilometre all-weather road running from the site of the defunct Jericho mine, which is located at the northern end of the Tibbit-Contwoyto winter road, to a deep sea port at Grays Bay on Coronation Gulf.

That would provide access to valuable mineral properties in the western Kitikmeot, especially the rich zinc, lead, copper and silver properties, worth at least $10 billion, controlled by MMG Ltd. at High Lake and nearby Izok Lake.

MMG, however, has said it’s not economically feasible for them to develop those potential mine sites and build a transportation system on its own.

As a result, those properties have been mothballed since 2013, when the company suspended its environmental assessment application with the Nunavut Impact Review Board.

And MMG Canada’s president Sahba Safavi told Nunatsiaq News this past August that unless a transportation system in the region is funded, they won’t move on the project.

“Until the project is considered economic and the infrastructure issue is resolved, we cannot advance to the next step, which would be revising our project proposal—and which is a crucial step before re-initiating the regulatory approval process,” Safavi said last year.

“Should funding for the GBRP be approved, we would work with the Government of Nunavut, the KIA, regulators and local communities, so that we can begin the process of revising our project proposal.”

For its part, the GN said it continues to support the project in principle, “and will monitor developments of the GBRP and provide support where applicable.”

The GN has spent at least $2 million on Grays Bay already, to pay for permitting activities.

This past January, Northern Affairs Minister Carolyn Bennett, following a screening recommendation from the NIRB, ordered a full environmental assessment of the project, with public hearings.

That assessment is still in its early stages. The NIRB is still working on figuring out the scope of the draft environmental impact statement that the KIA will have to provide before regulators can take a close look at the project’s social and environmental impacts.

Any delay in building Grays Bay casts a dark cloud over a long-sought-after dream in the Northwest Territories: a road from Yellowknife to the Arctic coast.

A second phase of the Grays Bay road, not part of the current proposal, would run from Jericho south to the Nunavut-N.W.T. border, where it would connect with a road to Yellowknife that the GNWT hopes to build one day.

An economic assessment of the project done for the Nunavut Resource Corp. by Impact Economics of Yellowknife, estimates the Grays Bay price tag at $527 million.

But the study also said the project could become “a potential watershed” for Nunavut, because it would unlock known mineral resources that have been stranded for decades.

This map shows the route for the proposed Grays Bay port and road project in western Nunavut. (FILE IMAGE)
This map shows the route for the proposed Grays Bay port and road project in western Nunavut. (FILE IMAGE)
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(20) Comments:

#1. Posted by IceClass on April 14, 2018

“Nunavut Resource Corps.”

Nuff said ...

#2. Posted by The Old Trapper on April 14, 2018

Would someone explain to me why the KIA, or the GN, or the government of Canada would spend a single dollar to benefit the Chinese state?

MMG Ltd is owned by China Minmetals which is a Chinese state owned company. They which be the primary beneficiaries who would be able to mine the estimated $10 billion in resources at High Lake and Izok Lake.

China Minmetals is one of the world’s largest resource companies and can well afford to invest in the necessary infrastructure for the Grays Bay road if they want to get the resources out of the ground.

Someone also needs to do some research on China Minmetals labour and environmental practices, there have been a number of serious issues in the past with this company.

#3. Posted by help on April 15, 2018

Good move, help Nunavut people not china

#4. Posted by Knockout Ned on April 15, 2018

#2 - Because some folks in Cambridge Bay want to see a transfer of wealth from the GN to KIA coffers.

This is isn’t necessarily bad, but it does make pause and consider the social programming and infrastructure that wouldn’t be built or funded if this ridiculous Road to Nowhere was built. Especially considering the inability of RIA’s to turn their millions into results on the ground for Inuit.

#5. Posted by Jeff on April 16, 2018

Looks like Kitikmeot heavy hitters been silenced. Taptuna, Peterson, Lyall, Evalik. Back to drawing board gents.

#6. Posted by Northern Guy on April 16, 2018

This is the best news I have heard in a very long time. It is heartening to hear that the Government of Canada isn’t in the business of enriching private companies through the thinly veiled argument of so-called “nation building”. Funding Grays Bay with public money would be corporate welfare pure and simple. If the project is viable then the mining companies can build on their dime not the public’s.

#7. Posted by The Old Trapper on April 16, 2018

#4 Knockout Ned, I agree that a project of this size would be easy pickings for a few people in the region to put millions into their pockets. I think that we know all the usual suspects.

I don’t see the road being used to bring and building materials into the region to alleviate our housing shortage, nor any lower cost food to help the families with kids who go hungry.

Road to Nowhere - right!

#8. Posted by monty sling on April 16, 2018

i applauded gn and the feds, sorry kia (lol), this eskimo elephant cannot do, boy, chinese company really pull blind folds over you heads eh? you don’t even have communities on the proposed shore to benefit any inuk, lining your pockets!!!! speaking of nunavut fleecing. good move minister.

#9. Posted by Northern Inuit on April 16, 2018

this is great to hear.  why in the world would the Fed’s finance this deal to assist the Chinese and Mining Companies profit even more to this pipe dream?

who else would have benefitted from this?  Kitikmeot Inuit Association?  Kitikmeot Corporation?  KC Sister Companies?  Other Companies that KC see fit?

in the recent years watching KC, I think of the scene in Oliver Stones movie JFK where Donald Sutherlands character asks “who benefitted from this operation?”

the same needs to be asked about KC lately.

#10. Posted by Putuguk on April 16, 2018

The answer to the question on why KIA would want to build a road for a Chinese company is simple; they want to make money.

If the Chinese company built it themselves, they would pay no toll to anyone.

At best, KIA could only hope with this scenario would be for some construction and maintenance contracts.

There are other non Chinese owned mineral deposits and more to be found in this area. Some of these deposits are owned by the KIA.

The plan as I understand it is to have MMG pay for the road through tolls, and then continue to use the road to support other mining operations in the future.

All along they would gain revenue in the form of tolls paid by anyone who wants and needs access to the coast. 

The KIA is not building a road out of the goodness of their hearts. It is a business decision.

KIA business arm is not in a position to build hotels for hordes of government travelers. They have to pursue other ideas.

#11. Posted by Jobi on April 16, 2018

Thanks for explanation Putugak. So now that no road guess mining progress will continue on same course. Slow steady progress and caribou and animals won’t be terribly affected.

#12. Posted by Copperminer on April 16, 2018

I would like to start out by thanking Minister Saviqataq and Premier Quassa for ripping up the Gray’s bay Road and Port project.

Why are you preventing Kitikmeot Inuit from having a brighter future and also preventing us from owning our own major infrastructure. Which in turn would have given our people opportunity through employment, financial stability and equality. In by having a say as to what we want in securing our wellbeing going into the future.in turn I hope you continue to ensure that Kitikmeot Inuit do not have the capacity or opportunity to empower themselves.

Lie if you have to just like you did during the Nov 17 leadership race. MLA’s including those sitting in cabinet do not have the capacity to understand what you have done!

#13. Posted by boris pasternak on April 16, 2018

will #12, for 4000 ppl and a chinese company? this was kia boss pet project and it was expensive one, perhaps it be a better argument if you try to connect through paulatuk and on to tuk…i have seen many things proposed but this one took the cake, icing and all.

#14. Posted by Stoner on April 16, 2018

No future no jobs now. Glad weed is being legalized. Can stay home now and vision !

#15. Posted by Truth? on April 16, 2018

While running for premier Paul said he supports the grays bay road. Why did you change your mind Paul?

#16. Posted by Balance on April 16, 2018

#12 and 15 there’s a difference between supporting it in principle assuming the feds and industry are going to do the heavy financial lifting without it impacting GN allocations vs. supporting it no matter what and being ready to devote hundreds of millions of GN dollars to it. Big difference.

To the Grays Bay haters - you’re right about the KIA’s irrational greed, but don’t throw the baby out with the bath water. This would be a good thing, it would do much more than subsidize MMG.

#17. Posted by Jeff on April 16, 2018

A question to whoever was driving this project. Did u demonstrate in ur funding proposal a significant cost-share with multiple partners before submitting to the feds? If not then of course they r going to shut u down. Delusional to think otherwise.

#18. Posted by Heads I win, Tails you lose on April 16, 2018

What EVERYONE is forgetting is that whether the project goes ahead or not doesn’t matter one bit to the primary beneficiaries - the consultants who no doubt made a pretty penny selling KIA the bill of goods that is the Nunavut Resources Corporation.

#19. Posted by Quvianakuni on April 16, 2018

Thank you Feds and GN, mining companies build roads, railroads and ports on their own to make money everywhere else in Nunavut.  If they will make money and it makes sense they will build it eventually as the minerals will not run away.

#20. Posted by Knockout Ned on April 17, 2018

#10 Putuguk: If the KIA wants to build this road to make money, why should the GN and GoC pay for it?

Socializing the risk while privatizing the reward would not benefit Nunavut.

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