Board approves mine expansion, slams feds
Doug Ashbury
Northern News Services
Yellowknife (Feb 12/01) - Three kimberlite ore bodies at Ekati mine will bring economic benefits to BHP and the federal government, but not to the territorial government.
The current territorial-federal fiscal arrangement is preventing the NWT from economic diversification, which may be setting the stage for a boom-bust economy, according to a review by the Mackenzie Valley Environmental Impact Review Board.
The board released a report last Wednesday of BHP Diamonds' mine expansion plan for three additional ore bodies, and has recommended the expansion.
"The review board recommends that the Government of Canada reconsider the formula financing agreement and that the GNWT be provided additional revenues to support, and where necessary, expand its role in the management and mitigation effects associated with development," the board recommended.
The report now goes to Indian Affairs and Northern Development Minister Robert Nault for acceptance, rejection or modification.
"Overall, the board found the environmental impact of the three kimberlite pipes ... not significant," board spokesperson Roland Semjanovs said.
But what it did find "significant" came under the socio-economic heading, he adds.
Mining the diamond-bearing ore of Pigeon, Sable and Beartooth kimberlite pipes will add three years to Ekati's mine-life, bringing it to 18 years and, says BHP, continue employment and income benefits.
BHP estimates 4,108 person-years of employment would last three more years and spending with local business would continue. The company also estimates annual purchasing of $78.3 million with Northern businesses.
But the board has "low confidence" in BHP's Northern employment and Northern expenditure predictions. Predictions on these fronts turned out to be below actual figures.
According to the report, there is a 50 per cent variance between Northern predicted and actual 1999 employment levels, and a five-fold difference between predicted and actual expenditures in the North, as well as mine-plan volatility (in 1996, mine life was estimated at 25 years).
"The review board concludes that the employment and income effects of the development are subject to rapid and significant change and reminiscent of boom and bust cycles that happen in less than one generation but where effects, both positive and negative, last multi-generations."
BHP spokesperson Graham Nicholls was unavailable for comment at press time.
The GNWT adds in the report that the small-community unemployment rate since Ekati construction started in 1996 has climbed to 39.7 per cent from 29.2 per cent. The GNWT indicated purchases by BHP for 1999 show one-tenth of one per cent of Northern purchases were spent outside Yellowknife and Hay River.
