Layoffs, scaled-back shipping as Baffinland refocuses on Steensby railway
Mining company to focus on ‘rapid development’ of Steensby railway and port, suspends request to ship 6 megatonnes of ore annually
Baffinland Iron Mines Corp. has suspended its application to ship six million tonnes of iron ore a year from its Mary River mine, shown here. Instead, the company is refocusing on an earlier plan to ship its iron ore through a port in Steensby Inlet rather than through its existing port in Milne Inlet. (Photo courtesy of Baffinland Iron Mines)
Baffinland Iron Mines Corp. will lay off 10 per cent of its direct and contract employees as part of a wider plan to focus on building the Steensby Project, a rail line extending 149 kilometres south from its Mary River Mine to Steensby port.
“Baffinland’s Inuit employees will not be affected,” Peter Akman, the company’s head of communications, said in an email.
He said the layoffs are part of a “series of initiatives” that began on Sept. 17 to ensure the company’s “continued viability.”
According to its website, Baffinland employs more than 1,200 people at a number of locations, including the Mary River Mine site and Milne Port.
Akman said the layoffs are being worked out with the International Union of Operating Engineers, which represents workers at the mine, and in accordance with the Inuit Impact and Benefit Agreement.
A representative for the union could not be reached for comment Friday.
Baffinland also recently suspended its application to the Nunavut Impact Review Board for permission to ship six million tonnes of iron ore per year out of Milne Inlet.
The company, which operates the Mary River iron mine on northern Baffin Island, is instead redirecting “all efforts and resources” toward “rapid development” of its Steensby Inlet project, Akman said.
The company’s request to suspend a review of this proposal is included in an Oct. 3 letter addressed to federal Northern Affairs Minister Dan Vandal, which is posted to the review board’s public registry.
Baffinland was applying to transport six million tonnes of iron ore annually through Milne Inlet until Dec. 31, 2032, or until the company finishes work on a railway and deepsea port south through Steensby Inlet.
The Steensby project would include shipping 18 million tonnes of iron ore per year through Foxe Basin and Hudson Strait via a 149-kilometre railway south from Mary River Mine to Steensby Inlet. That project also includes a deepsea port and other facilities to support processing and transportation of iron ore.
Steensby was part of Baffinland’s original proposal for Mary River, which the federal government approved in 2012.
Two years later, in 2014, the company turned away from its plans for the Arctic railway, saying the project was unaffordable at the time. Baffinland instead applied to ship 12 million tonnes of iron ore annually through Milne Inlet and Eclipse Sound, which are known to be environmentally sensitive areas.
The federal government rejected that plan in 2022 after a heated, years-long public hearing.
The company’s request to suspend the review of what it calls its “sustaining operations proposal 2” is included in the Oct. 3 letter to Vandal.
Baffinland came up with its first sustaining operations proposal in 2023 to keep the mine operating after Vandal rejected its proposal to expand operations and double its shipping output.
The company’s refocus back to Steensby is a “strategic shift” that is “aimed at ensuring long-term operational success,” said Akman, who cited extended periods of low iron ore prices as a reason for the shift.
Global iron ore prices have generally fallen over the year from a high in January of $US144 per tonne. The price on Friday was $US105 per tonne.
Baffinland is scaling back down to what the company had already been approved to ship through Milne Inlet — 4.2 million tonnes of ore annually. Since 2018, the company has been operating under temporary permits that allow it to ship six million tonnes per year.
“This adjustment will allow us to streamline our operations, reduce overhead costs, and focus on the necessary work to advance Steensby,” said Akman.
Baffinland is still working to secure funding for the project. An updated estimated overall cost is still under review, Akman added.
When the company was last raising money for Steensby, in 2012, the project’s estimated cost was $5.7 billion.
“Once funding is in place, a detailed timeline will be shared, including the anticipated start date for construction and the estimated time to reach completion,” Akman said.
Our MP must be thrilled. Here is some good news for her to campaign on.
The sad part is that they only say what you want to hear, will not believe what the company says until they prove it.
I worked there for years and got out of it in early 2023. The writing is on the wall. I just can’t figure how this company has stayed operating up to this point. The overhead cost of mining so far north is incredible. A lot of poor costly decisions on phase 2 has never helped. Decisions made on hopes of getting approved and never did. I think there is far more behind this decision then “streamlining” operations to focus on Steensby. I’ve heard from good contractor sources that there’s no money left there. Hard to get financing for a project when you have no money or collateral besides your equipment which you need. But I could be wrong
Sadly, Nunavut is not a great place to invest or do business. The only thing this territory seems to aspire to is status as a cultural museum, literally frozen in time.
Nobody wants to work and keep taking handouts from the government.
Sad but true. While the people are still learning how to make iglus, harpoons and drum dancing the world is passing by. Sense of entitlement galore.
No ambition.
Canada has had to look for workers from outside the country because NOBODY in Canada wanted work.
Willing hard worker immigrants come here and we, “real Canadians” whine the immigrants are….”stealing our jobs.”
The union up here are useless!! They were invited in by the company and just collecting money from us! One mechanic jumped ship to join the union and got a 40,000 dollar a year raise just to sit in the chair and agree with what the company wants.
Here’s the perfect example of what happens when you cry and moan for a union to come in. Easier for a company to just flat out mass layoff with no sort of warning or repercussions.
It must go by seniority I would imagine- oh wait look, it says no Inuit employees will be laid off.
So clearly seniority doesn’t matter! What great work from the local 793 union up there protecting their union brothers and sisters.
That place wanted a union in and it has collusion written all over it.
i’ve been an observer/participant in early years of the development of this unique project. there was a lot of “get this going” for this project in its early years, up until the recent. there is/was alot of “my way or the highway” attitude from alot of company people. there needs to be more talks, open dialogue, reciprocating discussions on how to get this moving forwards. it is possible. alot of the attitudes to the region play a role in its lack of forward movement. the narwhal population has moved to other communities, as far as grise fiord/resolute bay, and communities to the west. (i have visited these communities, i’m not a scientist, but community members are saying they have alot more narwhal in the recent years than ever before. i don’t want to use the word compensation, but there needs to be better representation on behalf of the company instead of what they currently have, towards the communities. the company can move forward. its just a matter of when they decide to work WITH the communities instead of against them.
I believe as has been said that the writing is on the wall. In December 2022 after the federal government said no to expansion, I made the decision to part ways.
More recently the President and CEO who had been with the project for 8 plus years also pulled out and left, taking over a new mine in Labrador.
Putting all efforts into building Steensby is great but you just gave up $198 million by stopping your request to continue to ship 6 million tons and revert to approved 4.2 million tons. That equates to 198 million based on $110 per ton.
Raising in excess of 7 billion dollars is no easy feat. Current investors have never realized a return on investment. Why would new investors want to engage? I buy shares monthly in Agnico Eagle and B2Gold. I would not put my money into Baffinland.
Layoffs have already been happening at head office. Now it will extend to site based employees. 170 to 200 that will be impacted. Great that no Inuit will be impacted, but for how long? Baffinland can not start to build until they secure funding in excess of 7 billion. Good luck.
I just wonder how much In royalties nunavut will loose buy bim not shipping those 2 million tonnes