Derek Neary
Northern News Services
Monday, July 10, 2017
IQALUIT
An arbitration panel has ruled that Baffinland Iron Mines owes close to $7.3 million in advance royalty payments to the Qikiqtani Inuit Association.
The ruling, made in Vancouver, settled a lengthy dispute between the two parties in regards to the interpretation of clauses in the Inuit Impact Benefits Agreement (IIBA), which was signed Sept. 6, 2013.
"I am pleased that the panel affirmed our interpretation of the IIBA. Agreements with Inuit should be honoured by companies that want to work with us," QIA President P.J. Akeeagok said. "This is Inuit money that will be invested in our communities and in the future of our children."
The exact amount owing to the QIA, as of June 30, is $7,265,422.74.
The arbitration panel ruled that advance payments must continue to a maximum of $75 million, adjusted for inflation, until the Mary River mine reaches commercial production as defined in the IIBA, which would be 60 per cent of 18 million tonnes of iron ore per year.
Todd Burlingame, Baffinland's vice-president of sustainable development, said the mining company respects and will comply with the arbitration decision. He said he doesn't believe there will be any long-term animosity between Baffinland and the QIA as a result of this dispute.
"Interestingly, this exercise has probably proven to improve the relationship," Burlingame said. "There was a lot of tension and stress leading up to the arbitration. Having worked through this process really has allowed us to become far more communicative with the QIA. I honestly believe we have a better relationship now than prior to starting this.
"We really do think it's important now that we just keep working with the QIA to make sure that those benefits get to the north Baffin communities."
Economic conditions, however, have been working against Baffinland, Burlingame acknowledged. The price of iron ore was close to $140 per tonne when the IIBA was signed in 2013.
It is closer to $62 now, and that's following a recent modest rally from the mid-$50 range.
"Every day is a struggle to keep above board, but we're doing everything we can to keep alive," Burlingame said of the challenges for the company to remain profitable.
The QIA stated that the advance royalty payments owed will be deposited in its Legacy Fund, which means there will be more available to spend through the Benefits Fund for language, culture, counsellor training, Inuit media, community hunts and elder and youth programs.
The QIA indicated that it will also be seeking the reimbursement of legal costs for the arbitration hearing.
The 43-page arbitration ruling comes as a result of a process that began in July 2016.
The QIA, which represents more than 14,000 Inuit, was represented by lawyer Thomas Berger.
