High transport costs block development
Meeting mining needs: Cambridge Bay hosts symposium
by Doug Ashbury
CAMBRIDGE BAY (Apr 06/98) - Lower the Arctic premium -- the high price paid for fuel -- and mining will go forward in Nunavut, Nuna Logistics chief executive officer John Zigarlick told Nunavut Mining Symposium delegates.
Zigarlick estimates it costs about 20 cents a litre just to deliver fuel to the Lupin gold mine.
If Lupin was located just about anywhere else in the world it would still be open, he said.
"Get rid of the Arctic premium and we are world-competitive."
Zigarlick, who has spent 25 years working in the North's mining industry, 16 as president and CEO of Echo Bay Mines Ltd., which owns Lupin, was among an extensive list of speakers and delegates at the third annual Nunavut Mining Symposium.
In all, about 250 people descended on the Victoria Island community of about 1,350 for the event.
Sponsored by the Kitikmeot Corporation and the Kitikmeot Chamber of Commerce and co-ordinated by Outcrop Ltd., the symposium was held in Cambridge Bay March 26-30.
To help solve high transportation costs, which add to production costs in the North, Kit Resources Ltd. president and chief operating officer Robert Gilroy said the proposed deep water port built in Bathurst Inlet at a site across from Bear Creek Hills is a solution.
The port would service ocean-going ice-class vessels and help Kit develop its George and Goose lake projects as well as servicing other Northern mines.
Building Phase 1, the port and the road to Contwoyto Lake, could cost $130 million and generate an estimated 1,000 jobs. Gross payroll for the project would be around $75 million, Nuna Logistics president and chief operating officer Mervyn Hempenstall said.
Phases 2 through 4 include roads connecting Izok to Lupin, a turn-off to George Lake, and linking Fry Inlet to BHP and Diavik.
Asked who would fund the project, Hempenstall said: "We're hoping to see a joint-partnership between government and the private sector."
Gilroy suggested the future of Nunavut "hinges on the development of this infrastructure."
Commodities coming to the proposed port yearly would include 130 to 200 million litres of fuel and 15 to 25 thousand tons of ammonium nitrate. Outgoing from the port would be 400,000 tons of ore concentrate.
The road will greatly reduce costs for the region's mines.
Meeting three mines' fuel needs in the region takes one truck leaving Yellowknife every half hour for 67 days.
The next step to develop the port and road system will be environmental studies and surveys.
Despite any desire to go forward with the massive infrastructure project, there will be stiff opposition, lawyer David Searle said.
"There will be one significant battle over it. This is something of a major target for environmental organizations who see themselves as protectors of the Canadian wilderness," Searle said. Searle is based in Vancouver but has practised law in Yellowknife.
If the system is built, one of the world's largest caribou herds, the Baffin herd, will have to migrate across it.
And Bathurst Inlet is not the only Arctic coast spot being looked at for a port. There is a similar proposal for a port at Kugluktuk.
Northern Miner editor Vivian Danielson, also speaking at the symposium, said the Bathurst port and road transportation plan will come under public scrutiny.
She suggested the North would do well to align itself with moderate environmental groups willing to listen to information on the project.
She said Northerners will need to be "prepared for those who want the North undeveloped."
Southerners have a "perverse, romantic notion that Northerners are better off living off the land."
On training, Mike Ballantyne, co-chair with Deton'Cho Corp's Darrell Beaulieu of the Mine Training Committee, said it is unrealistic to expect the industry to act alone when it comes to preparing people to work in the mining industry.
The Mine Training Committee, convened by Education, Culture and Employment Minister Charles Dent, includes industry and aboriginal representatives wanting to see Northerners trained for and employed in mining.
One of the committee's aims was to match Northern college training to industry needs.
"There's no point in having a college generate something the industry is not happy with," Ballantyne, who is also Aber Resources senior Northern advisor and a former GNWT finance minister, said. Aber is the junior mining company with a 40 per cent stake in the Diavik diamond project.
NWT Chamber of Mines general manager Mike Vaydik said Nunavut will need to get its "geoscience house in order quickly."
Nunavut needs to provide a place where data is assembled and should "place a high priority" on such a move, he said.
Mapping projects are proven to heighten exploration activity.
On suggestions for next year's symposium, one individual said he would like to see youth included in the program.
To help review the symposium, a report will be drafted.
To help cut transportation costs, specifically flying costs, Saskatchewan-based Cameco geologist Ted O'Connor suggested mining companies might consider joint-venturing with an airline to lower travel costs. Cameco's joint-venture is with Saskatchewan-based West Wind Aviation has lowered charter rates by half after initial financing of a Hawker Siddley aircraft, he said.
A Natural Resources Canada official suggested the mining sector would benefit from the publishing of a simple overview of mining each year.