Ottawa removes annual production limit on Nunavut iron mine

A view of Milne Inlet several years ago. This area will get more intense use when the Baffinland Iron Mines Corp. makes more use of it to ship ore to market during ice-free months. (FILE PHOTO)

(Updated 11:30 a.m., April 29)

The federal government has rejected a recommendation from the Nunavut Impact Review Board that would have limited the quantity of iron ore that Baffinland Iron Mines Corp. may ship from Mary River.

This means that in the future, Baffinland may ship more than the annual limit of 18 million tonnes a year that NIRB recommended this past March.

This and other changes to NIRB’s recommendations are contained in an April 28 letter from Bernard Valcourt, minister of Aboriginal Affairs and Northern Development to Elizabeth Copland, the NIRB’s chair.

In it, Valcourt and four other federal cabinet ministers said they accept the review board’s recommendation that Baffinland’s Milne Inlet early revenue phase proposal go ahead, subject to 182 terms and conditions.

But federal officials amended nine of those conditions and rejected another.

The rejected condition would have prohibited Baffinland from shipping more than 18 million tonnes of iron ore per year Mary River.

The NIRB had included that recommendation in a report they sent to Valcourt this past March 17.

That report flowed from public hearings held to look at Baffinland’s “early revenue phase” proposal, under which the firm would start the project by shipping between 3.5 million and 4.2 million tonnes of ore through Milne Inlet, to the north of Mary River, only during the ice-free season.

Under Baffinland’s original plan, for which it received a project certificate in late 2012, the company would ship 18 million tonnes of ore 12 months a year via rail and ship through a port at Steensby Inlet, to the southwest of Mary River.

But the company amended that plan early in 2013, saying market conditions require them to start generating revenue earlier.

The company said they still plan to build the expensive rail and Steensby Inlet port system they contemplated in their original proposal, but only after the Milne Inlet plan commences.

The NIRB, after scrutinizing the Milne Inlet proposal, imposed a new condition: the total volume of ore mined from Deposit #1 not exceed 18 million tonnes.

That condition would apply even if the Milne Inlet and Steensby Inlet routes were to be used at the same time.

But the five federal ministers who looked at the NIRB’s recommendation said this condition is too restrictive.

“The responsible ministers have rejected this proposed new term and condition on the basis that it is more onerous than necessary,” Valcourt’s letter said.

And they said the NIRB did not provide enough evidence to support the idea that an annual tonnage limit would mitigate any adverse socio-economic and environmental impacts, including cumulative impacts.

The next steps in the approval process will include a teleconference workshop this month on the project certificate that will effectively authorize the construction and operation of a full-blown iron mine based on the early revenue proposal.

Also, in a separate letter, Valcourt accepted only one of two recommendations from the Nunavut Planning Commission that would amend the North Baffin Regional Land Use Plan to accomodate the Milne Inlet proposal.

Valcourt rejected the NPC’s “Amendment No. 1,” because it restricts the Milne Inlet corridor to “a single user and a single use.”

“This approach is at odds with key principles found in the North Baffin Regional Land Use Plan and general land use planning principles…,” Valcourt’s letter said.

That proposed amendment will now go back to the planning commission for reconsideration.

Valcourt did accept a second amendment, which sets out a map and boundaries for the proposed transport corridor.

But Valcourt did say in his NIRB letter that the NPC should now be able to make a “conformity determination” on the Milne Inlet proposal.

Under Baffinland’s original scheme, the company would extract about 18 million tonnes of iron ore each year and ship it from a port at Steensby Inlet connected to the mine site by a railway.

From the Steensby port, huge, 320-metre ice-breaking ore vessels would move 12 months of the year through Foxe Basin and Hudson Strait to steelmakers in Europe.

But under the revised plan, first announced in January 2013, Baffinland would ship smaller amounts of ore through Milne Inlet until they generate enough revenue to finance the original plan.

Baffinland and the Qikiqtani Inuit Association have already signed an Inuit impact-benefit agreement and commercial production lease for the Mary River mine.