QIA wants more talk with Baffinland over threat to mothball Mary River mine

Mining company CEO sent internal letter on April 30

P.J. Akeeagok (right), president of the Qikiqtani Inuit Association, and Brian Penney, president and CEO of Baffinland Iron Mines Corp., sign an amended Inuit impact and benefit agreement October 2018 in Iqaluit. QIA says it wants to continue talking to Baffinland about the mining company’s plans to scale back activities at the Mary River mine. (File photo)

By Jane George

The Qikiqtani Inuit Association hopes Baffinland Iron Mines Corp. will reach out with more information about its plans to scale back operations at its Mary River iron mine, says its executive director, Jeremiah Groves.

QIA, which leases its land to the mine, has received and responded to a recent letter from Baffinland, Groves told Nunatsiaq News.

He said the organization hopes Baffinland will “engage QIA to better understand the contents of [this] letter and implications for the Mary River project.”

The letter contained much the same information as Penney’s April 30 letter to employees and contracting staff on site, said Baffinland’s manager of stakeholder relations, Heather Smiles.

Penney’s letter said shareholders wouldn’t invest more money in a proposed expansion at Mary River, because of delays in the review process and opposition to the expansion.

Penney also said forecasted reductions in iron ore prices in future years could cause additional financial losses, so the company would “begin taking a series of steps to reduce costs and curtail spending.”

To date, the benefits to the QIA from the Mary River mine, located on north Baffin Island, have been substantial: the Inuit impact and benefit agreement pumps millions annually into the organization.

The Oakville, Ont.-based mining company wants to double output at the mine, as well as build a 110-kilometre railway from Mary River to Milne Inlet and increase ship transits to 176 each season. The proposal is making its way through a hearing with the Nunavut Impact Review Board.

In March, QIA’s board of directors passed a unanimous decision to not support the proposed expansion in its current form.

QIA still wants to continue working with Baffinland to improve the project so it’s “consistent with an Inuit vision of balancing environmental impacts together with economic opportunities,” Groves said.

As for Baffinland, Smiles said the company wants more support from the QIA and others in the region. In February, hunters blockaded the mine site to protest its environmental impacts.

Their blockade ended after a week when Baffinland sought an injunction in Nunavut court.

“We’re are going to continue to work with all of our community members and all of the stakeholders to find a path forward, and we’re very much keen to do that,” Smiles said.

The mining company needs approval for its proposed expansion, she said, and it wants “more clarity” about when the hearing into that expansion will conclude. The hearing was temporarily suspended in April, when the COVID-19 outbreak hit Iqaluit.

With no end to the permitting process in view, Baffinland has decided to ship equipment it had leased for the mine expansion off-site this summer.

“The costs to send it off and potentially return it in a year will not surpass the costs we’re currently paying to have it sitting there in a year,” Smiles said.

“There are all these costs associated with it sitting there, so we have to make these decisions now because the sealift is when the sealift is. This was a logical course.”

The Mary River mine employed more than 300 Nunavut residents before they were sent off-site last March to prevent COVID-19 spread in the territory, but the mine is now battling its own outbreak.

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(43) Comments:

  1. Posted by You Were Warned on

    QIA and NTI withdrew their support for political reasons, Ocean’s North claimed the mine didn’t need a railway and NIRB figured out that if the hearings are delayed indefinitely, investors will leave and they won’t need to make a decision. Baffinland has been cautioning all parties involved what their continued opposition would create and unfortunately this is the result. Unless someone pulls a rabbit out of a hat, there’s going to be a lot of unemployed workers and almost a quarter of Nunavut’s GDP will disappear within a year. Everyone accuses mine management of not listening, but it turns out no one was listening to them. Someone in government please fix this broken process that repels investment in Nunavut.

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    • Posted by you’re joking on

      Wow – is this really your read on this situation? This is frankly laughable. By your logic, every project assessment is essentially a hostage-taking where everyone should just bend over and take it, ‘because…jobs!’. Utterly ridiculous. Nunavut has something the world needs. And that ore should generate revenue for Nunavut, whether or not people decide they want to wear a hard-hat, because that ore is the birthright of Nunavummiut (and to be really specific Inuit as the deposit sits largely on a couple of IOLs). In order for that ore to come out of the ground, the project proponent (BIMC) has to convince the regulator (NIRB) that they can run a mine that doesn’t produce significant environmental impacts. The position of QIA, NTI, and other intervenors in this process (like Oceans North) is that BIMC has not convincingly shown that impacts will be below an acceptable threshold. In other words that acceptance of the mine (and the proposed expansion) is to accept a major and potentially irreversible set of changes to the environment. The political calculation being made is that they (and the Inuit who live in the impacted communities) would rather have a functioning ecosystem than a broken one after a few decades of employment (and that is not an exaggerated statement as BIMC has not convincingly proven that they are not already having significant impacts, even pre-expansion). Seems pretty reasonable to me. I won’t even touch the concept of ‘social license’ here because obviously that’s beyond you.

      You can read BIMC’s message re: having to shutter the shop in 2 ways. If you’re a cynic you might say, this is classic miner talk – strong arm people until they grant you the go ahead. If you’ve got a couple of braincells to rub together you might say, their bet hasn’t paid off – they thought they could make a go of it, turns out they didn’t do the math correctly and it actually isn’t economical.

      To summarize for you – the idea that this is somehow the fault of Inuit is absurd. BIMC might fail in its mission to mine iron ore on Baffin Island because they failed to build a good business based on telling the truth about their impacts, and doing the math right to account for the volatilities which every commodity market faces.

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      • Posted by Not Joking on

        What is an acceptable time-line for NIRB hearings to be held when it comes to mining projects in Nunavut? Two years, three years, five years? Every time a hearing adjourns there is understandably some valid opposition to a project and then another extension is scheduled based on the same talking points. If CoVid didn’t disrupt the most recent hearing, I’m sure we would be waiting on another round of hearings. There should be set deadlines to reject or endorse a project. Without any deadlines in the process, the NIRB is a repellant to investment in Nunavut.

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        • Posted by Check your info on

          Why don’t you look and see what really happened? NIRB has it all on their website. Mary River was approved in 2012 after 4 years of the review process. The Baffinland applied for the Early Revenue Phase right away in 2012, and received approval in the middle of 2014.
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          Then in 2017 they filed for Phase 2, and the final hearing was scheduled for 2019, but then the hearing fell apart when NTI made its motion to adjourn with the cooperation of QIA, the North Baffin communities, both governments of Nunavut and Canada. NIRB had no choice. There was no point going forward if all the people who had to grant permission were saying no. The NIRB tried for March 2020, but that was cancelled at the last minute due to the outbreak of the pandemic and nobody being allowed to travel. Then they tried the new hearing in January 2021, but because of all the questioning, they couldn’t finish in the two weeks they had. Then they tried April to finally finish, and COVID hit Iqaluit, and they had to abruptly cancel again.
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          If the final public hearing hadn’t broken down into chaos and EVERYONE (except Baffinland), including the two governments told NIRB to delay until some issues were worked out, then the NIRB decision would have been issued in early in 2020. If COVID hadn’t hit in March and NIRB, like everyone else, had to try and sort out how to work, the decision would have been around the middle of 2020. If people didn’t drag out the hearing in January 2021 so it couldn’t finish despite NIRB trying to, they’d have had their decision out by now. So what do you suggest they should have done?

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    • Posted by GDP?! on

      A quarter of Nunavut’s GDP is .04% of the national GDP. To suggest that this should factor into the decision making of the Inuit of Pond Inlet and surrounding communities is BEYOND LUDICROUS. Get that garbage outta here.

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      • Posted by So what? on

        What does this metric you’ve decided to use have to do with anything? Honestly?

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  2. Posted by The Truth Hurts on

    If this board called QIA is finally figuring out that their tactics not going to work it seems that their whole reason of voting against the expansion is all about money.
    Where I come from they call that greed…
    Have a nice day QIA…

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    • Posted by Real truth on

      If you knew a little bit more you would know QIA was actually leaning towards supporting the expansion but due to political pressure they went the other way, it looks like they are reviewing this again and looking at what might work best.

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      • Posted by Northern Guy on

        Yes real banana republic stuff from QIA and NTI. Rather than making an evidence-based decision both organizations simply went with the squeaky wheels and now it has come back to bite them. Good luck making up for the hundreds of millions of $$ that Baffinland would have provided over the life of the mine.

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        • Posted by More responsible on

          Good, another mine can take over that is more responsible!

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          • Posted by Northerner on

            If you really think another group of investors will want to dump money into this mess you are sadly mistaken. Inuit have managed to make the entire territory a red “no go” zone for investors. Good job

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            • Posted by John K. on

              There will be tons of investors! They’ll line up from here to Beijing!

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          • Posted by George Barnes on

            No other mine will want to take over nti qia are acting like the mine owes them more. Now they will be getting faaaar less more welfare

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            • Posted by Standing strong on

              If Baffinland feels Inuit are not playing fair then they can leave anytime. When a tenant is breaking stuff and lying they get kicked out all the time.

              We will not be bend over and take it. This is our land! We cant go home to Toronto after meetings are done like Baffinland. They are the guest! We stay here forever.

              Go ahead click the downvote. Baffinland and the future mines will know if they want to extract our land then they will always deal with us. No other choice!

              If you dont like it go work somewhere else anywhere else in the world.

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              • Posted by Uh-huh on

                And they will. And you’ll have nothing. But I’m sure you’ll feel good about it.

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                • Posted by Strong too on

                  Lol, I know I will, because my land will still be healthy and productive. Southern fools say we are all about money. Mirror time!

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                  • Posted by Ditto on

                    “Your land will be healthy and productive” – Sure, with global warming, you should be able to grow wheat up here.

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                • Posted by Sharpshooter Inuk on

                  Nunavut was fine before baffinland. Nunavut will be fine after baffinland.

                  Baffinland is not BE ALL END ALL!

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  3. Posted by Huvaguuq on

    Yep, playing with the big boys is a whole different game! Be careful who you are taking advice from

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  4. Posted by Northern Guy on

    Way too little way too late QIA. You threw your partner under the bus and now you want to talk to them. Better start getting those pink slips ready; there is no way QIA will be able to afford paying all those new employees once Baffinland’s payments dry up.

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  5. Posted by Philip Uvilluk on

    If this ever shuts operations in near future, look at number of local people out of work. Trades alone, if they finish apprenticeship program in 5 years from now and every five years, let say 5 -10 each time, that is a lot of qualified tradespeople earning top dollar. Politicians and everyone else, look to the future and training opportunities available the odd time industry comes your way.

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  6. Posted by Truestory on

    Q.I.A. big wigs must be freaking out. Their bonus royalties might dry up now.

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  7. Posted by Skilled Politicos Needed on

    In a more functional world this is where a skillful MP might help negotiate a workable plan that doesn’t cost the territory hundreds of jobs and millions in revenue but also addresses people’s environmental concerns. Can you imagine what that might look like?

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    • Posted by Perplexed on

      Have to agree, when our MP is taking leadership cues from activists and mediocre folk bands on twitter, we are not in a good place.

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      • Posted by Hope Springs Eternal on

        On the bright side at least she is on leave, which should mitigate much potential damage at this time.

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  8. Posted by J-z on

    This was enevidable. Bottom line if there is no railway then Baffinland loses. They bet WAY WAY to much on assuming they would get what they want, hence all the millions in broken and outstanding contracts ( that qia knew about).
    .
    If, if anyone takes over this mine site (which they eventually will) then the lesson is not to assume that Inuit are willing to forego their ecosystem for a handful of jobs and empty promises.
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    The lesson to investors, and QIA, is that qia are not the ones to talk to. They do not represent the northern communities, this is now apparent. This whole time they have wrongfully fired their community reps that have said this truth during this process and their reputation is exposed and ruined. QIA can plead all they want, but BIM now know that they are only a shell of a much bigger picture.
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    I am glad the southern world saw Inuit unite. Harder to do things like this in the south where its warm. I, for one, am looking forward to taking my dog team out to the fishing lake where we all eat.
    .
    Take care BIM. Maybe next year the narwhals will roam back and we have clean ocean ice too.

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    • Posted by LARRY on

      Yes j-z,i will meet you out there with my dogteam, and fish, and on 2nd wednesday,of the month we can meet in the social sevices office,and pick up our social assistance check .to feed our familys

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    • Posted by Northerner on

      Comments like that make all Inuit look like clueless Eskimo’s as they would call us.

      No, if Baffinland gives up the project its over.

      Inuit were fine before Baffinland??? Do you see what is happening in the communities right now and call.it fine? Seriously? What is wrong with you?

      Inuit want to live their lives but also enjoy the white man’s world. Can’t have it both ways.

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  9. Posted by Richard Morley on

    I think the bottom line is that things like this cannot go on forever. These big companies and their investors want stability or a higher return on their investment for any associated risk. Then there is the price per ton of iron ore.

    Yes the territory will become associated with uncertainty and high operating costs. A project has to be so profitable that really few exist. But thats the choice the people of Nunavut, that its beneficiaries make.

    Future inestors/companies will look at Mary River as an example of this.

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    • Posted by Jen on

      As an example of being straight forward with your intentions, instead of being shady, then exposed. If they said what they wanted in the beginning and negotiated to the top line then they wouldnt have drowned in investment debt.

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  10. Posted by Fredrick on

    This is an incredibly divisive issue with a doubt. There are huge economic opportunities for all kinds of individuals, inuits especially. That being said, I’ve seen pictures of the land by Pond Inlet where the shore is covered in ore dust- heart breaking.

    There has to be some clear cut proven methods utilized to prevent the dust spreading. You never know, if the ore is being shipped in enclosed railway cars and crushed in a building compared to out in the open, I think that decreases the overall dust no matter the volume. Also, I’d make all the surrounding areas by Port have better protective screening to prevent the dust from getting into the water or on nearby land. Lastly, make the ships turn left in the Arctic Bay, and go around that island on top towards Europe afterwards. Extra fuel, but then the ships don’t affect any direct waterways by any of the communities.

    As for all these people hating on BIM, they’re trying to make money and they’re providing good paying jobs with benefits. Besides the government or a banking institution, what jobs provide that in the communities? New boats, buildings, feasts, training, and I’m sure it’s only a matter of time before more people start advocating that BIM should have to solve the communities housing problems since the GN hasn’t done anything to solve that.

    I think the CEO is gaslighting for sure, but I don’t blame the investors for refusing to put more money into it. Hundred of millions could be better invested at this rate and I’m not hedge fund manager. Also, say they get 600 million revenue annually, that’s not a lot. You’ve got good wages, overtime, equipment, food, trucks, electricity, chartred flights, millions in food, payments to communities, royalties, contractors, the list goes on. Yes it’s a tactic, but he’s also saying it like it is. People need to stop thinking BIM is that rich.

    There’s so much more money and benefits that can be made for everyone. People just need to work together and meet in the middle. My two cents on this.

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  11. Posted by North baffiner on

    One media threat from bimc as they like to do everytime they don’t get what they want and QIA takes the bait again? Sigh this is getting old.

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  12. Posted by Me on

    QIA needs to work with Inuit abiding with their wishes, keeping Nunavut clean and animals from pollution is the wish of Inuit, if QIA listened to Inuit and responded earlier and quicker NONE of this would be happening. Allocation of royalties lots of Inuit never saw, QIA spending for themselves. Campaigning for QIA Chair will have to include the promise to spend royalties to Inuit of Nunavut

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    • Posted by QIA Should start in the Hamlets on

      It’s real rich hearing how the Inuit are all about the environment when you go to a community and see nothing but garbage and rusting machines leaking oil onto the land.

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      • Posted by Zinger on

        Funny, where the fanciful narrative collides with the ugly reality. Good one.

    • Posted by Cigarette butts on

      I’m sorry but I cannot stay quiet about Inuit asking for clean environment. Hmmmm……. are we?
      Cigarette butts in lakes,rivers,sea, land and A Lot in the community, we have handful of non-smokers,(Inuit) who go on the radio asking people to bring their cigarette butts and the people who complain for clean environment don’t have problem throwing their cigarette butts anywhere.
      Us non-smokers, are we going to be able to go to public places without having to inhale “accidentally” a second hand smoke when going shopping, going to work, going to clinics? At least the masks are somehow protecting us.

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  13. Posted by Steve Hartwell on

    Maybe there’s a lesson or two from the past. Below is a link to a 1960s film about Pond Inlet’s Inuit mining a nearby coal seam for a few days every spring just before thaw. I uploaded it just last night to my youtube channel. I appologize if my 2021 update message at the end is no longer accurate. It wasn’t till after the upload that I stumbled on these articles and learned of the shutdown of the Mary River Mine. Lesson might be, you own it, you mine it, you sell it to those who want it for what you want to get from owning it, mining it, and selling it.

    https://www.youtube.com/watch?v=t_F_iItL1YE

    Pardon this 70 year old southern white guy for butting in with two cents about the Mary River Mine when I can’t possibly comprehend it as you do. My wife and I care too much about Canada, and that includes Mittimatalik. We’re very sinkened by the fact that Canada is owned, controlled, and run by Americans. Too few realize this fact, or welcome it if they do know.

    Posters keep talking about BIMC as though it’s a southern Canada owned company but it isn’t. It’s co-owned by a big steel company in India and an American natural resources investment company in Houston Texas. I doubt very much they give a damn what happens to the Inuit of Baffin Island, nor the land nor wildlife. Only you will really care about you.

    Seems to me that if the owners of BIMC really have walked, then the mine is yours again. When the people of Churchill Manitoba lost their train service to nature and the American company walked, they finally arranged to take over the whole thing, with the help of Ottawa.

    If the majority there want the best of both worlds, and you really have to, then that’s what you now have to do too.

    Anyways, that’s my two cents.

    Steve Hartwell
    St Catharines, Ontario, Canada
    http://www.homemovies.ca

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    • Posted by Pork Pie on

      Steve, I sense in your writing a tremendous anxiety over globalization, and it is a widely held one. But is there a fundamental and measurable difference between Canadian and foreign owned corporations in a context like this?

      On a broad level it seems the mission of any large company is the make a profit. Does this make corporations conspire against every force that might add friction to this end? It obviously could, but is this necessarily a default position?

      Given the billions needed to bring an operation like this into being there is no surprise it is a multi-national entity. This is unavoidable. Yet, regardless of where a company comes from, is it not possible to enter good faith agreements between parties, where mutual obligations are bounded within contract and law? There is no alternative to this that I can think of, Canadian ownership included.

      • Posted by Steve Hartwell on

        Pork Pie – I appreciate your response. You are correct, it should be that way, but, as I said I’m 70, and I can tell you from long personal experience I’ve been screwed over by Americans WAY more times than by Canadians. There’s a very long list of what’s called “Brown Fields” in Canada, toxic pollution left behind most of them by American companies who flew the coop after they got what they wanted, despite iron-clad contractural agreements to not do that, and no way to force them to fulfill their contracts to clean up after themselves. I personally do not trust them anymore even 1 millionth of how far I’d like to throw them all out of Canada. My two Canadian cents worth advice.

        • Posted by Do some research before you make assumptions on

          Baffinland runs a high grade (80%+) iron ore mine. It does not have tailings ponds. All pollutants, including sewage and contaminated soil, are shipped down south on Sealift at great expense for remediation. Sorry, no brown pools full of toxic chemicals. QIA and the GN would never allow that.

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          • Posted by Steve Hartwell on

            Why then were the hunters having to hitch rides on the trucks to get thru and past the mine to go hunting ? They say it’s because of all the choking iron dust all over the place. That qualifies as a ‘brown field’, if it’s true. But now the company has banned them from riding the trucks so they can’t get past all the iron dust to go hunting. And, why have the seals and walruses and whales stopped visiting their traditional bay, and the caribou stopped migrating thru the area ? Gee, I wonder who’s telling the truth.

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