The global mining industry arrives in Nunavut

Rich iron deposits near Roche Bay, south of Hall Beach, have attracted the interest of a Chinese pipe-making company that’s ready to spend as much as $1 billion to fast–track an iron mine into production. (FILE PHOTO)

Pushed by the developing world’s growing hunger for consumer items, civil unrest in many countries, and “random” events like the recent tsunami, earthquake and nuclear power plant disaster in Japan, mining companies around the world are eying Nunavut with far more interest than before.

That’s the dominant message at this week’s Nunavut Mining Symposium in Iqaluit, which is built around the theme “Going Global.”

The symposium’s keynote speaker Patricia Mohr, an economist and commodity specialist with Scotiabank, sees no end to the desire for resources world-wide or to the influx of mining companies into Nunavut.

A “tsunami” of money is now flowing into Canada’s oil, gas and mining industries from China, which wants to build more houses, cars, railway and ports, she said.

And, to do this, its industries need iron, nickel, zinc and copper in addition to other metals and minerals.

Due to the recent nuclear disaster at the Fukushima Dai-ichi power plan in Japan, the demand and price for uranium have taken a blow, but with 67 new nuclear power plants slated for China, Mohr sees uranium prices staying strong over the longer-term.

Many investors are also turning to gold and silver, because they don’t have trust the U.S. dollar or the Euro, she said.

As for Nunavut’s advantages to resource-eager markets, these include its stable political atmosphere and its lands, rich in minerals and metals.

But mining companies also list disadvantages, such as an undereducated workforce, poor infrastructure, a complex regulatory regime and harsh weather.

Mining companies want to “go where the political risk is low” and “where we are welcomed,” said Ebe Scherkus, president and chief operating officer of Agnico-Eagle, which owns Nunavut’s only operating mine, the Meadowbank gold mine near Baker Lake.

Companies also want to keep their workers and investors’ money safe, Scherkus said, citing a recent incident in Mexico where Agnico-Eagle employees were held at gunpoint, robbed and subjected to death threats.

Nunavut is safe, but its Inuit impact and benefit agreements are costly and difficult to negotiate, environmental permitting takes too long, logistics are hard, and training and education require more work, he said.

Then, when a project gets the green light, “where is the workforce coming from?” is the next question companies ask themselves, said Scherkus, noting that with more than 130 workers from nearby Baker Lake at Meadowbank, that source of local workers is now tapped out.

Still, the pluses have major international mining companies scrambling to invest in Nunavut.

Many mining companies, backed by Chinese or other international money, are now willing and eager to enter Nunavut.

The list of major exploration projects in Nunavut, who participated in the Nunavut Mining Symposium, now includes:

• AngloGold Ashanti, a gold producer operating in 11 countries, and Commander Resources, which are looking for gold in central Baffin Island. Since 2003, the company has discovered a long belt of high-grade gold deposits along a 140-kilometre stretch of land that they’ve called the “Ridge Lake Prospect,” near the site of the old Foxe 2 and Dewar Lakes DEW Line site;

• Vale, the second-largest mining company in the world and owner of the Voisey’s Bay nickel mine in Labrador, has two nickel exploration projects in Nunavut, in the central area of the Melville Peninsula and on Southampton Island;

• Advanced Explorations Inc. and XingXin Iron Pipes, one of the world’s largest producers of cast iron pipe, are exploring with the goal of producing a feasibility study for an iron mine at Roche Bay near Hall Beach; and,

• Areva, the world’s largest uranium producer, which also has mines in Niger and Kazakhstan, wants to see 600 workers produce 3,500 tonnes from its Kiggavik property near Baker Lake;

• MMG, the Chinese-owned Minerals and Metals Group, plans to beef up its deposits in 2011, spending $12 million to look for more zinc in and around its Izok Lake property in the Kitikmeot region;

• Newmont Mining Corp., the world’s largest gold producer, which plans to sink another $300 million into its Hope Bay and other properties near Cambridge Bay.

And there’s ArcelorMittal, the steel-making giant and the new owner of the Mary River project.

Arcelor Mittal has ambitious plans for a $4 billion iron ore mine 160 km from Pond Inlet. The mine, which would have a lifespan of 21 years, possibly as soon as 2015, calls for:

• mining, ore crushing and screening operations;
• 150-km railway, with 24 bridges, two tunnels, 20 culverts and 144-car trains running twice a day to and from Steensby Inlet; and,
• 12-month shipping with huge icebreakers.