Agnico Eagle is warning the Government of Nunavut that a carbon tax would not only hurt the company’s viability, but could also deter future mining investment in Nunavut.
The warning came in an email sent to Nunavut Premier Peter Taptuna last month. It was tabled in the legislature on Wednesday – the same day Finance Minister Keith Peterson gave his budget address, where he stressed that the success of the mining sector was crucial to the territory’s future.
Agnico Eagle owns the Meadowbank Gold mine in the Kivalliq and its board has approved the construction of two more gold mines in Nunavut. In its letter it said it costs twice as much to develop a gold mine in the North than in the South.
The federal government is aiming to have carbon pricing in place by 2018 starting at $10 per tonne, then raising it annually to $50 per tonne by 2022. Agnico Eagle said the tax would be a blow to its efforts to sustain a mining platform in the North.
“The wall-to-wall application of the carbon tax to Nunavut would reduce even further the attractiveness of Nunavut for mining investors,” the letter read, signed by the company’s vice-presidents Louise Grondin and Dominique Girard.
“Based on the proposed carbon-tax pricing scheme, the impact to Agnico Eagle will be approximately $20 million per annum in 2023 for its carbon emissions in Nunavut.”
Given Nunavut’s lack of infrastructure, the territory is powered almost entirely by diesel fuel, and Agnico Eagle’s site is no different. The company anticipates that 80 per cent of the carbon emitted from its future Meliadine site – slated to open by 2019 – will come from power generation.
“We are sympathetic to the global concerns about CO2 levels,” the letter reads, “but burdening the sole emitter in the Kivalliq region, who happens to be the largest and only scale industrial employer in the region, may do more harm than good to the future economic viability of the region’s communities.”
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