Conservationists allege Baffinland withheld vital information from regulators

Oceans North says the company told investors it could triple production at the Mary River mine—a far bigger increase than what’s been publicly considered

Baffinland’s port at Milne Inlet. The company is proposing to build a railway between Milne Inlet and the Mary River iron mine to ship expanded quantities of high-grade iron ore to its customers. The final public hearing on the proposal is scheduled to start on Saturday, Nov. 2, at the Iqaluit cadet hall. (File photo)

By Jim Bell

(Updated Nov. 1, 4:30 p.m.)

Citing allegations of “major inconsistencies,” Oceans North, a conservation organization active in Nunavut, wants the Nunavut Impact Review Board to suspend its environmental assessment of Baffinland Iron Mines Corp.’s railway-based phase two expansion plan for the Mary River iron mine.

They allege Baffinland has failed to disclose the full scale and impact of the project to the NIRB and to the public.

“The Proponent has failed to disclose critical information of direct relevance to a fair assessment of actual and potential impacts of its project proposal,” Oceans North alleges in a notice of motion filed with the NIRB on Tuesday, Oct. 29.

The result is that regulators cannot properly assess the phase two expansion project, Oceans North alleges.

Oceans North filed its notice of motion with the review board on Oct. 29, saying they’ll ask that the NIRB hear the motion on the morning of Nov. 2, when a final public hearing on Baffinland’s expansion proposal is scheduled to start at the Iqaluit cadet hall.

Allegations of conflicting production levels

At the heart of their notice of motion is an allegation that, in 2018, Baffinland gave potential investors a description of the expansion project that differs from the description they’ve given regulators.

Oceans North’s evidence in support of that allegation includes a 722-page document called a “preliminary offering circular” that Baffinland distributed among potential bond holders in 2018. (See the document embedded at the foot of this story.)

Oceans North, in its notice of motion, says they want that document placed on NIRB’s public registry, along with an affidavit from Oceans North researcher Georgia MacDonald.

That document did appear, on Oct. 29 and part of Oct. 30, on a public registry list related to the review board’s consideration of the Baffinland expansion proposal.

But it’s now gone from NIRB’s site. At the end of the day yesterday, NIRB said Baffinland has raised a “confidentiality issue” with the document and that NIRB is reviewing it.

This screen shot from NIRB’s public registry, made at around 10:30 a.m. Oct. 30, shows that Baffinland’s 2018 preliminary offering circular, indicated with a checkmark, had been available to the public for downloading. It’s now gone from the registry. At the end of the day yesterday, NIRB said Baffinland has raised a confidentiality issue and NIRB is reviewing the issue. (Click to enlarge.)

“The Proponent’s Preliminary Offering Circular (2018) reveals a large body of information regarding project plans that are fundamentally inconsistent with the project proposal under review,” the Oceans North notice of motion alleges.

Bond sales are a common method that companies, governments and other large entities use to borrow money.

Those who purchase a bond are effectively lending money to the company, to be re-paid after a fixed period of time, in exchange for an agreed interest rate.

Nunatsiaq News has viewed a copy of the preliminary circular offering. In that June 2018 bond offering, Baffinland proposed to borrow US$550 million to help finance its railway-based expansion plans.

In its pitch to potential investors, Baffinland appears to tell investors that the company may use its proposed Arctic railway to ship up to 18 million tonnes of iron ore each year through its port at Milne Inlet by 2021.

“Primary models and mine plans have been developed around the Rail Expansion work to support rail haulage of up to 18 Mtpa [metric tonnes per annum] of iron ore through to Milne Port,” the company states on page 105 of its bond circular.

On the other hand, the project proposal Baffinland filed with the NIRB seeks permission to ship only 12 million tonnes of ore through Milne Inlet, with future development shifting south to Steensby Inlet.

That’s double the six million tonnes the company was permitted to ship in 2019. A production increase of up to 18 million tonnes would represent a tripling of production from this year’s level.

An affidavit filed by Oceans North researcher Georgia MacDonald—published online yesterday by The Narwhal—also alleges that Baffinland told investors about plans to ship up to 18 million tonnes of iron ore through Milne Inlet, which suggests that there could be more that 200 ship transits per year through Eclipse Sound.

Oceans North has already said it fears that increased production and ship traffic poses unacceptable risks to narwhal and to the marine environment.

In a written response made on Nov. 1 to the Oceans North motion, Baffinland said the motion is without merit and should be dismissed summarily.

In another written response Nov. 1, a lawyer representing the Government of Canada said Georgia MacDonald’s affidavit and relevant sections of the circular to bondholders should be put on the public record. But the federal government also said they are opposed to a suspension of the proceedings.

The review board has not ruled on Oceans North’s allegations and has neither rejected them nor accepted them as fact.

Oceans North also says they will ask the review board to suspend its environmental assessment proceedings on the expansion project until after the NIRB and interested parties have had a chance to review the Oceans North material.

Baffinland offers to file confidential summary of financials

In another notice of motion, Baffinland’s lawyers say they will ask the NIRB for permission to file an 11-page summary of its consolidated financial statements.

That summary will explain why the project “cannot sustain production of 6 million tonnes per annum on an ongoing basis and that the Project is only financially viable at a greater rate of production,” the Baffinland notice of motion says.

But Baffinland told the NIRB they want that financial summary to be kept “entirely confidential” and that it should not be placed on the review board’s public registry.

The company has claimed in the past that the Mary River project cannot become viable unless it expands.

The review board’s public registry at www.nirb.ca contains multiple documents related to environmental assessments and is accessible to anyone with an internet connection.

In a letter filed on Tuesday, Oct. 29, the NIRB agreed to consider the motion immediately after its chairperson makes her opening remarks at the start of the public hearing on the morning of Nov. 2.

Baffinland Preliminary Offe… by NunatsiaqNews on Scribd

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(21) Comments:

  1. Posted by Consistency on

    Wow Baffinland, again with the lies. Say no to phase 2. make them tell the whole truth of what they see the mine becoming. if it really is not viable at the current production rates for a few more years while they figure out how to tell the truth then perhaps it is not in Nunavuts best interest.

    • Posted by Ronald Amusterdand on

      I am amazed at all of the negative publicity that is given to Baffinland and the project. Very seldom do you read about the good work the mine is doing, and the true benefits to Nunavummiuit. What about the jobs often paying in excess of $100,000.00 with NLA. What about the support and donations to the local communities. What about the level of employment created? What about the expansion of industry within Nunavut, and future potential? Are you really so willing to say whatever? It doesn’t matter? Wow!

      • Posted by Consistency on

        Yes your not wrong that Baffinland does give some things back to the communities, and they provide jobs, however right now there are not enough Inuit that are trained to fill every job at Baffinland so increasing production wont help us. But with the rail line and the increased shipping there is no way that there will not a a very large permanent negative impact on wildlife. also I get Baffinland is not going anywhere but if production is increased it will decrease the life of the mine so when they are no longer here to provide the $5,000 to a community Christmas hamper and we have no whales, seals or caribou then what. It may not be us that feels the worst impact from this (as we can work in the mine to feed our family) but it will be our children, grand children, and there grand children. that will not have jobs or food.

      • Posted by Skeptical on

        The facts have been clearly examined and stated by Nunatsiaq News. Either Baffinland lied to potential investors or it lied to NIRB and Inuit. Lying to investors is potentially fatal. The resulting lawsuits could sink the company. As for jobs? Their track record hiring Inuit after 7 years is pretty poor. Their relationships with communities is poor. Public meetings? No one shows up. People are tired of power point presentations and being talked down to. Sure they throw some money at communities. It makes them look good and they hope it gets them support for their plans. Their research is terrible. It shows everything will be wonderful – no problems and they will take care of everything. Are we really going to believe this? Should we believe that if they don’t get this Phase 2 what they are doing now isn’t economically viable? The reason they don’t want us to see the financial info that was on line is because it makes it clear this isn’t true either. I looked at it. Should we believe anything? You decide.

      • Posted by Seriously? on

        Ronald, either you don’t understand the article or you’re some kind of Baffinland troll, because I can’t imagine that you actually think it’s alright for this company to take advantage of the good will and hopes of these communities.

        This article isn’t saying there aren’t benefits to the Mary River Project– no one is saying that. The article is reporting on the fact that this massive company lied to communities (and non-profits, the government of nunavut, etc.) who came to them in good faith to discuss this development.

        Baffinland told communities one thing (12Mt through Milne), because they knew that sharing their real intentions (18Mt through Milne) wouldn’t be considered an acceptable development path.

        Baffinland told investors something else entirely (18Mt) in a legal document used to raise more than half a billion dollars.

        These documents were published within a couple months of each other.

        Baffinland has been lying to communities. Their actions show that they do not believe Inuit deserve their honesty. How can you be okay with this? If they will lie about something as enormous as this, how can we trust them to be transparent about absolutely anything else?

        • Posted by Jenny tolls on

          Haha you obviously dont know what really goes on here at baffinland do you, yes some inuits get jobs, but there is pressure to produce so no time for training on production jobs, as for environment water truck runs a handful of times on the mountain but it’s ok a picture was taken of the water truck watering the roads 1 of those 5 times to satisfy the communities by saying there’s no dust. And there’s no good ore left in the pit, lots of waste though!

    • Posted by James DiMarco on

      Baffinland has always been straightforward about their plans to eventually increase production of the mine to 30 million tonnes per annum. Expansion will be a slow and steady process for a long period of time as the company develops the mine and adds more local employment.

  2. Posted by deleting files on

    Baffinland just deleted that file on the NIRB website. They must be trying to hide something. Could Nunatsiaq post it on Scribd? Thank you.

  3. Posted by qujannamiik on

    Qujannamiik Ocean’s North!!! Great work. I think the railway expansion would be a total disaster for north Baffin and disruptive to the land and wildlife. Baffinland is proving to be uncaring about Inuit or the land. Where is QIA in all this? QIA should have done this work.

  4. Posted by Fact Checker on

    To investors “… a rail and car system that MAY haul UP TO 18 Million Tonnes”
    On file with NIRB “12 Million Tonnes” (easily achievable)
    Seems like they are just giving the maximum possibility to achieve a better payout from investors. We are lucky we don’t have to beg for money; feds just give it to us.

  5. Posted by Putuguk on

    What a joke.

    My truck can support speeds “up to” 160km/h.

    That does not mean I am planning, scheming, intending or otherwise wanting to go any faster than 60km/h -the fastest you can drive anywhere in town by law.

    Must have been a slow week for donations to Oceans North.

  6. Posted by Inuk Power Ranger on

    Oceans North loves to attack any economic sector, especially mining. You fooled us Inuit, Oceans North. Oceans North should marry Greenpeace! Oceans North is foreign funded namely by the UNITED STATES of AMERICA. What the heck, where’s the Federal Government Canada when it comes to such matters? Are we getting foreign aid to benefit the Americans?

    • Posted by Actual Fact-Checker on

      if you care about foreign money, you probably already know that Baffinland is a foreign-owned company from THE UNITED STATES OF AMERICA– the American company Energy Minerals Group owns Nunavut Iron Ore, which has a majority stake in Baffinland. The profits from the Mary River Project are going TO the US.

      This expansion would only increase those profits while creating risk for Nunavut.

      Pretty ridiculous to imply that oceans north is somehow a US agent when their work undermine US profits

    • Posted by Alt-right alert on

      Baffinland is owned 31& by Arcelor Mittal and 69% by Energy & Mines Group of Houston, Texas.

      So what was that you were saying about foreign money?

      By the way, it is highly disturbing to see somebody from Nunavut spouting that kind of alt-right garbage about Oceans North. Shame on you.

  7. Posted by Baffin Dog on

    Isn’t Baffinland owned by $12-billion private equity firm (Energy & Minerals Group) in Houston Texas…Who gets foreign aid?

    More importantly the Narwhal article says they are making far more profit on 6 million tonnes than they ever disclosed, and they need to triple it? But according to their spokesperson, the “Economics of the project are not such that it can be sustained [at current production rates],” said Lord-Hoyle. – CBC News Jun 19, 2019. This is a matter of trust.

  8. Posted by Actual Fact-Checker on

    if you care about foreign money, you probably already know that Baffinland is a foreign-owned company from THE UNITED STATES OF AMERICA– the American company Energy Minerals Group owns Nunavut Iron Ore, which has a majority stake in Baffinland. The profits from the Mary River Project are going TO the US.

    This expansion would only increase those profits while creating risk for Nunavut.

    Pretty ridiculous to imply that oceans north is somehow a US agent when their work undermine US profits

    • Posted by James DiMarco on

      Please don’t forget that 1,000 jobs X close to $100,000 a year is still $100,000,000 that stays in Canada with an ever increasing amount staying in the North.

  9. Posted by Jason smith on

    Soooooo the affidavit filed says that Baffinland lied to communities. It uses Baffinland’s own documents to prove it.

    It has been two days and Baffinland still hasn’t responded to these allegations.

    If they had an honest explanation we would have heard it by now.

    …but Baffinland did make NIRB take the docs down.

    Looks to me like Baffinland is trapped in their lies and just throwing legal threats around trying to suppress this.

  10. Posted by Sim on

    Where is QIA? The inuit orgs need a shake up to wake up. AGENDA FOR INUIT LEADERS: Throw on another seal skin vest and sign something today, MAKE SURE TO SMILE🤣

  11. Posted by Shut Them Down on

    This isn’t the first time that Baffinland has failed to produce adequate information, or false information. They do it because they can.
    They are purposely difficult with the Inuit organizations that they have partnered with, failing to comply with their contracts.
    SHUT THEM DOWN! See how fast they they realize whom they are trying to take advantage of.

  12. Posted by Duhh on

    “Economics of the project are not such that it can be sustained [at current production rates],” said Lord-Hoyle.

    Yes, at some point in time all the iron will be gone from Mary River. At that point the current production rate will not be sustainable. Duhh.

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