Infrastructure deficit hampering western Nunavut mine project: MMG

MMG wants partners, maybe government, to help pay for port, airport, road, microwave broadband system


A map from the 2012 Izok Corridor project proposal shows where the all-weather road would run to the coast, not far from Kugluktuk.

A map from the 2012 Izok Corridor project proposal shows where the all-weather road would run to the coast, not far from Kugluktuk.

This photo from MMG's Izok Corridor proposal shows the layout of Grays Bay, where the company would like a partner to build a port and airport. (FILE PHOTO)

This photo from MMG’s Izok Corridor proposal shows the layout of Grays Bay, where the company would like a partner to build a port and airport. (FILE PHOTO)

You might call it a “challenge,” as an MMG manager put it, or you could see it as an ultimatum.

After sinking $300 million into studies to see if the mineral-rich Izok Corridor in western Nunavut is economically viable, the mining giant says it won’t move ahead with the project unless a partner helps build a port, airport, road and microwave broadband towers.

MMG ‘s delivered its latest message to residents of Nunavut’s western communities of Cambridge Bay and Kugluktuk this week: the lack of regional infrastructure is a deal-breaker for its plans to build a $6.5-billion network of lead, zinc and copper mines along the Izok Corridor.

Unless a partner is found to invest a “quite substantial” amount of money to build a deep-water port and airport at Grays Bay on the Coronation Gulf, a 325-kilometre all-season road and a microwave broadband network, the majority Chinese-government-owned company won’t go ahead with the project.

Since telling the Nunavut Impact Review Board in April 2013 not to proceed with its recommended detailed review, MMG has crunched its numbers in a $60 million feasibility plan and revised its 2012 Izok Corridor Mine Proposal.

According to information distributed at public meetings in Cambridge Bay, the two Nunavut communities closest to the Izok Corridor, the new, streamlined mine plan includes a relocation of the three-million tonnes per year ore plant at Grays Bay, more modular components into the mine deign and a mining of the most distant deposit, Izok, to followed by High Lake.

The mine, with a lifespan of 11 years could be operational in eight years.

But “one more hurdle exists,” MMG says in its project update.

“Even with all the changes and finding hundreds of million dollars in savings, the enormous capital costs of building the needed regional transportation and communications infrastructure is still more than the project can support.”

The company plans to tell the NIRB by the end of the year whether or not to proceed, Scott Trussler, MMG’s manager of approvals, said Sept. 8 at a public meeting in Cambridge Bay.

Trussler said the Red Dog mine in northwestern Alaska received Alaska state assistance for similar regional infrastructure.

MMG says there would be many benefits for the improved regional infrastructure the company needs in the Kitikmeot: the mine project would add $5.1 billion to the gross domestic product of Nunavut and $2.5 billion to the GDP of Canada.

During its operations, the mine would bring $391 million to Nunavut, equal to 18 per cent of the territory’s output in 2012, and $1.5 billion in jobs.

It would also increase inbound cargo and full storage capacity, assist with Arctic sovereignty and safety and spill response.

The haul road could lead to a winter overland link between the Northwest Territories and Nunavut and “progress towards an all-season link.”

At the Sept. 8 meeting at the Luke Novoligak Community Hall, several people asked about training, jobs and rotations — but Trussler said until a decision is made on whether to move ahead, it’s too early to talk about these issues.

The rich mineral deposits at Izok Lake and the other properties in MMG’s collection have been known to geologists since the late 1950s.

Since then, the on-again, off-again property has passed through the hands of many owners, none of whom ever figured out how to economically mine and transport the region’s huge stores of zinc, copper and lead.

The MMG group emerged after 2009, when state-owned China Minmetals Corp. gobbled up nearly all mines and exploration projects controlled by Australia’s debt-ridden Oz Minerals Ltd.

One of those properties was the lead-copper-zinc sites in the western Kitikmeot that Wolfden Resources Inc. had sold to Zinifex, the company that formed one-half of the short-lived Oz conglomerate.

MMG filed the first version of its project description with the NIRB on Sept. 4, 2012.

After a screening, with recommendations from the NIRB, Bernard Valcourt, the minister of Aboriginal Affairs and Northern Development, ordered in April, 2013 that the project get an environmental review under Part 5 of the Nunavut land claim agreement’s Article 12.

But soon after, MMG told the review board that they wanted want to file an updated version of the project description prior to the start of any work on scoping and guidelines for a future environmental impact statement.

That’s because the company wanted to consider “additional project design options with potential to improve the economic viability of the project.”

The economic viability of the project still hasn’t been established.

“This project will not be economically viable without investing partners to share the construction costs,” Trussler said in Cambridge Bay.

With files from Cambridge Bay

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