Tom Hoefer is the Executive Director, NWT & Nunavut Chamber of Mines. This article was originally in Canadian Mining Magazine.
The mining industry clearly dominates private sector contributions to the Northwest Territories economy. But then, one might expect it when the NWT is the world’s third most valuable producer of diamonds! Last year diamond production was valued at just over $2 billion, exceeding by 5 times the contributions of mining to either the Yukon or Nunavut’s economies. Add in some tungsten and copper from the Cantung mine, the NWT’s mining industry contributes one third of the GDP; with indirect benefits, it’s contributions are closer to half the economy.
It seems like only yesterday when geologists Chuck Fipke and Stewart Blusson made the first discovery, which resulted in production from our first diamond mine, BHP Billiton’s EKATI in 1998. This was followed in relatively short order with two more mines: Rio Tinto and Harry Winston’s Diavik mine, and De Beers’ Snap Lake mine.
Diamonds continue to create remarkable results. Since production began, our mines have created 20,000 person years of northern employment, and half of that Aboriginal. But that’s not all. Additionally, the mines have paid Northern businesses some $9 billion in capital and operating costs. And for the first time ever in our history – and notable in Canada’s too – $4 billion of that business has been invested with Aboriginal firms. This has created a surge in Aboriginal business creation and growth and is arguably the biggest economic legacy for those communities since the fur trade.
And we have high hopes that future mining growth will continue to provide the north with benefits. Diamond mining continues to be secure in the short term and our first mine is not scheduled to close until 2019. But since mine discoveries don’t come easily, it’s important that more projects are in the hopper.
To help sustain our industry and its many benefits, 5 new mining projects are in the environmental review or permitting processes; one has been completed and is in financing. They present an exciting and diversified portfolio that would see us produce diamonds, base metals, gold, silver, and rare earths.
Under environmental review at press time are:
• De Beers’ and Mountain Province’s Gahchko Kue diamond project,
• Fortune Minerals’ NICO cobalt-bismuth-gold project,
• Avalon Rare Metals’ Nechalacho rare earth project, and
• Tyhee Gold’s Yellowknife gold project.
Canadian Zinc’s Prairie Creek silver-zinc-lead mine is now in the permitting phase, and Tamerlane’s Pine Point lead-zinc project is in the financing stage. Following closely behind these projects is the Courageous Lake gold project owned by Seabridge Gold, who completed a positive Preliminary Feasibility Study this summer.
These projects represent good benefits through:
• Investments of $2 billion for capital construction alone;
• Total expenditures of more than $12 billion in operating costs over the mine lives; and
• Jobs for more than 1,400 workers to construct and operate the mines, generating some 25,000 person years of employment through their mine lives.
A number of companies are searching at the early, grassroots stage for a variety of commodities. Peregrine Diamonds saw excitement this spring, when they discovered three new kimberlite pipes – great success considering they only explored four targets. And given the new discoveries were in the famous Lac de Gras region that hosts our world class EKATI and Diavik mines, it’s a clear signal that there are still diamonds out there waiting to be discovered.
In addition to Peregrine’s hunt for diamonds, other companies hopeful they may discover the next world class deposit in the NWT include Harry Winston with partner North Arrow (diamonds) and Platinum Group Metals (platinum, nickel, cobalt) at Providence Lake, and BFR Copper & Gold (copper and gold) at Mazenod Lake (all projects north of Yellowknife); Copper North at Coates Lake (copper), Aben Resources (gold, silver, lead, zinc, copper) at their Selwyn Recce project, and Devonian Metals (lead-zinc) near Wrigley (all in the western mountains region); Bullmoose Mines (gold) and Tamerlane (zinc, lead, silver copper, gold) at Indian Mountain (both projects east of Yellowknife) in the rich Slave Geological Province.
Of course, to sweeten the odds of deposit discovery we would love to see additional grassroots exploration. To that end, a number of initiatives are underway to enhance the investment climate and make it more welcoming, including:
• The Federal Government (which effectively serves as the NWT ministry of mines) is advancing its Northern Regulatory Reform Initiative to provide more process certainty. Its biggest task is to amend the Mackenzie Valley Resource Management Act, the foundation upon which mine permitting and licensing are built. This act was the first of the new community based statutes driven by Aboriginal land claims in northern Canada, and is getting a little long in the tooth. Industry expects to see two year project review timelines legislated along with other progressive changes. This would bring it on par at least with similar legislation in the Yukon.
• The new NWT Government has committed to develop a Northwest Territories Mineral Development Strategy alongside a broader economic development strategy.
• The Chamber of Mines is working with Aboriginal groups to help build bridges with industry to add attractiveness; and
• A partnership society between Aboriginal groups, industry and government is also advancing training programs to bring even more Aboriginal and northern workers into our great industry to take advantage of the opportunities before us.
At the end of the day, geology is king in the North. With 8 geological provinces to provide variety and our huge amount of under-explored and under-mapped lands, we have great mineral resources still waiting to be found. Those in the know echo this – of 93 jurisdictions reviewed globally by the Fraser Institute think tank, the Northwest Territories ranked as 6th most attractive for its geological potential.
Canada’s Prime Minister put it succinctly on his recent northern tour: “… that great national dream — the development of northern resources — no longer sleeps. It is not down the road. It is happening now. The North’s time has come, my friends.”
Head on North and discover why.
For more information, visit the Chamber of Mines’ website at www.miningnorth.com.