Inuit org wants Valcourt to reject Baffinland request for land use exemption

Baffinland Iron Mines’ port at Milne Inlet, built to service the Mary River iron mine about 100 km inland and south of Pond Inlet. (PHOTO COURTESY OF BAFFINLAND)

Since Nunavut Iron Ore, a private equity firm, and Arcelor Mittal teamed up in 2011 to acquire Baffinland Iron Mines Corp., global iron ore prices have dropped by at least 65 per cent. Baffinland’s project certificate for the Mary River iron mine allows them to build a railway to a Steensby Inlet port site, but the company now says “the necessary capital investment for the railway/Southern Shipping Route option is not
feasible in the current economic environment.” Instead, they want to ship 12 million tonnes of iron ore each year through Milne Inlet for 10 months of the year, which would involve extensive icebreaking. (GRAPH FROM THE MOTLEY FOOL)

(Updated 6:45 p.m., May 22)

Bernard Valcourt, the Aboriginal Affairs and Northern Development minister, now finds himself at the centre of a big regulatory fight over an ambitious and controversial expansion plan that Baffinland Iron Mines Corp. proposes for its Mary River iron mine.

The Qikiqtani Inuit Association has announced May 22 that it opposes a May 21 request from Baffinland asking Valcourt to exempt its proposal from the North Baffin Regional Land Use Plan.

“I have invited AANDC Minister Valcourt to accompany me to Pond Inlet and hear the concerns of the Pond Inlet residents in person before making his decision on the exemption. Baffinland’s proposed project changes are significant. The people most impacted must be heard,” QIA president PJ Akeeagok said in the QIA’s May 22 news release.

This past April 8, the Nunavut Planning Commission rejected the Baffinland proposal, called “Phase 2,” which was aimed at amending the land use plan to allow Baffinland to ship up to 12 million metric tons of iron ore from Milne Inlet to Europe for 10 months each year.

That would mean using icebreakers to ship ore between November and March, when waters in the area are covered with ice.

The existing land use plan and the company’s existing project certificate allow them to ship only up to 4.2 million metric tons during the ice-free season.

Following the NPC’s April 8 decision, Baffinland first attempted to file an application with the NPC to amend the land use plan — but the underfunded planning commission told them they won’t likely have the resources to do that until 2016-17.

That means the Nunavut Impact Review Board can’t touch the application.

So now, Baffinland wants Bernard Valcourt, as the Aboriginal Affairs and Northern Development minister, to step in and exempt their proposal from the land use plan so the proposal can go directly to the NIRB for an environmental screening.

To that end, they filed an application with Valcourt May 21, saying that if he grants their request, their expansion proposal would go directly to the NIRB.

That, Baffinland said, is the best way to include the public in the approval process.

“The NIRB processes will include a public hearing, and opportunities for participation by any individual Inuk or Elders who wish to participate, the Qikiqtani Inuit Association (QIA), the community of Pond Inlet, the Mittimatalik Hunters and Trappers Association (HTO), and federal and territorial regulatory authorities with relevant expertise,” a Baffinland vice president, Erik Madsen, said in a letter to Valcourt.

But the QIA disagrees.

In its statement May 22, the Inuit organization said the best way to involve the public is through a land use plan amendment process.

“I have been pushing hard for an amendment route, as opposed to an exemption route, with key decision makers since NPC made the determination. I have consistently heard from the communities that they feel left out and that decisions are being made without their input when it comes to development projects,” Akeeagok said.

Under the first version of its project certificate for Mary River, issued Dec. 28, 2012, Baffinland is permitted to build a port at Steensby Inlet connected to the mine site by a railway.

Under that plan, Baffinland is allowed to ship up to 18 million metric tons of ore from the Steensby port using huge, cape class icebreaking ore carriers.

But less than two weeks later, Baffinland changed the scope of the project to provide for an initial “early revenue phase,” under which the company proposed shipping up to 3.5 million metric tons per year through Milne Inlet, which is connected to the mine site by a tote road, in the ice-free season only.

That’s because, due to plummeting iron prices, Baffinland can’t raise the $5 billion they need to pay for a railway and port.

After looking at the early revenue phase proposal, the NIRB accepted the necessary amendments to the company’s project certificate in May 2014.

But only about five months later, Baffinland asked for yet another set of amendments to their project certificate.

In that proposal they sought a major expansion of shipping from Milne Inlet — up to 12 million metric tons of ore for 10 months of the year.

Those changes included:

• an increase in Milne Inlet shipments from a maximum of 4.2 million metric tons of iron ore per year to a maximum of 12 million metric tons of iron ore per year;

• an extension of their shipping season from ice-free months only — roughly June to October — to a 10-month period stretching between June and March each year, including the November to March period when ice begins to form;

• an increase to about 150 voyages a year to and from Milne Inlet or Eclipse Sound, which separates Bylot Island from Baffin Island, including fuel and freight vessels;

• the use of two “self-discharging” ore carriers for the trans-shipment of ore to a huge Cape-class vessel in Eclipse Sound and waters off Greenland;

• at least one huge Cape-class ore carrier, and other large vessels which would receive trans-shipments of ore from the self-discharging vessels out at sea, in Eclipse Sound and off Greenland;

• the use of two tugs;

• the use of floating fuel storage in Eclipse Sound for refueling of the tugs;

• the use of two new ice management vessels at Milne Inlet;

• a second dock at Milne Inlet;

• refueling of vessels at Nuuk, Greenland; and,

• a three-fold increase in the number of haul trucks on the Milne Inlet tote road, from the currently allowed 22 to 75.

But the NIRB has yet to deal with that proposal.

That’s because the NPC determined in a decision issued this past April 9 that the proposal does not conform to the North Baffin Regional Land Use Plan.

To fix that, they told Baffinland that, under the Nunavut Land Claims Agreement, the company can either apply from an amendment to the land use plan or can ask Valcourt for an exemption.