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OTTAWA, TORONTO — The federal government has approved construction of the massive Mary River iron ore project in Nunavut, a move that could jump-start development of the Canadian Arctic.
Once built, Mary River could triple the territory’s annual economic growth rate and provide nearly $5-billion in taxes and royalties to the territory over its 21-year life.
“This is a game-changer for Nunavut and I think it’s very exciting to be a witness and part of the process,” Minister of Aboriginal Affairs and Northern Development, John Duncan, said in an interview Monday.
“We are going to end up with northern infrastructure, including a deep-water port, a road and a railway north of 60, which is pretty exciting,” he said. Construction on the project could begin as early as next July, and the mine could be in production as soon as 2017.
Mary River is owned and operated by Baffinland Iron Mines Corp., a joint venture between ArcelorMittal and Iron Ore Holdings LP that acquired the project together at a time when iron ore prices were at near-record highs.
Since then, prices for iron ore, the key ingredient in steel-making, have fallen dramatically as demand fell in China, the motor behind global commodities consumption for much of the past decade.
The project is still in the permitting stage, but for now its owners plan to spend some $4-billion to develop Mary River, even as some rivals postpone or cancel major spending plans in the face of the market slump.
“This signals us moving on through the environmental assessment phase and into the regulatory or permitting phase,” said Gregory Missal, head of corporate affairs at Baffinland.
Late last month, Cliffs Natural Resources said it was temporarily suspending the expansion of its Bloom Lake mine in Canada’s Labrador Trough. Brazil’s Vale SA, the world’s second-largest mining company, cut 2013 capital spending by 24 per cent following a drop in iron ore prices to a three-year low in September, Reuters reported Monday.
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