Nunavik's second nickel mine would create 270 jobs
Makivik signs benefits deal for nickel mine
Nunavik's second nickel mine moved one step closer to reality last week when Makivik Corp., Canadian Royalties Inc., and representatives of three affected communities signed an impact and benefit deal April 9.
After getting unanimous approval from Makivik's board of directors two weeks ago in Quaqtaq, the deal was signed at Makivik's office in Ville St-Laurent.
The agreement is modeled on the agreement that Makivik signed with Falconbridge Ltd. in 1995 for the Raglan mine.
As soon as the project passes its environmental review and gets the go-ahead from Quebec, Makivik will receive a $1 million signing bonus.
This will be followed by a second $1 million payment when the Nunavik Nickel Mine starts operations in 2010.
After that the deal would start generating an estimated $50 to $80 million a year in benefits for Makivik and the three communities nearest the mine, Puvirnituq, Salluit and Kangiqsujuaq, over the mine's estimated 10-year lifespan.
The division of these revenues will be worked out later between Makivik and the communities. It is likely to be similar to the formula used to split a recent $32 million payment from the Xstrata nickel mine, with Makivik getting 25 per cent and the three communities sharing 75 per cent.
The original draft of the IBA called for a 50-50 split of profit-sharing revenues between Makivik and the communities of Puvirnituq, Salluit and Kangiqsujuaq, but the communities objected.
Concerns about the impact of the mine on the Povungnituk River watershed were smoothed out after representatives from Canadian Royalties made a recent visit to Puvirnituq. They also met officials from Salluit and Kangiqsujuaq in Montreal.
Canadian Royalties plans to work closely with people in Salluit to manage the expected increase in icebreaker traffic, a major concern for the community.
"In the end, if people have the willingness to go back and give more information, things can be worked out," said Richard Faucher, CEO of Canadian Royalties. "It's taken an extra two to three months, but it was really worth it. It means there is a good trusting relation between Makivik, the communities and us."
The IBA also gives Inuit priority on jobs worth about $14 million a year as well as other spinoffs valued at $50 million.
The mine is expected to create 300 jobs during the construction phase and 270 jobs after the start of operations.
The target level for Inuit employment is 80 to 90 per cent during construction, Faucher said.
To encourage approval of the IBA, Canadian Royalties also agreed to increase the percentage of profit paid to Makivik and the communities if the price of nickel remains higher than $12 a pound.
"I think we can deliver their expectations. This is a great project, it's not the richest mine but it's still a very good project. You can do things neat, small, efficient and you can still make economic sense and create jobs," Faucher said. "Hopefully we can succeed."