NUNAVUT
Baffinland Iron Mines Corporation received approval last week from Aboriginal Affairs and Northern Development (AANDC) for its amended Mary River mine project.

A 2012 photo of Baffinland's Mary River project exploration camp with deposit number one in the background. The company has now received federal approval for its proposed early revenue stage of mine development. - photo courtesy of Baffinland Iron Mines Corp.

“It’s very good news,” said Greg Missal, Baffinland head of corporate affairs. “The (Nunavut Impact Review Board), once again, put a lot of work and a lot of effort into getting this amendment through.”

“It’s a good sign for Nunavut when projects like this can get going.”

The amended, “early revenue phase” of the project had already received approval under the Nunavut Impact Review Board (NIRB), and was referred to Aboriginal Affairs for ministerial approval last month. This was the final step before the project could receive final project approval and certification.

The approval brings with it several modifications of terms and conditions the review board attached to its approval of the revised project.

Most modifications made by Aboriginal Affairs surrounded clarification of requirements, extension of caribou protection requirements along proposed transportation routes and the specification of a timeline for Baffinland to prepare and submit a labour market analysis.

Most significantly, Aboriginal Affairs removed an 18 million tonne per annum restriction on iron ore extraction the NIRB had imposed.

Baffinland’s early revenue phase project description included shipping up to 4.2 million tonnes of ore through Milne Inlet, near Baffin Bay (the company now expects to transport approximately 3.5 million tonnes per year). This was to be in addition to the 18 million tonnes of ore originally proposed to be shipped through a proposed port at Steensby Inlet, approximately 150 km south of the mine site.

The NIRB had imposed the restriction based on the potential cumulative environmental impact of increased iron ore production and transportation.

The removal of this restriction by the feds was justified by as the removal of an overly restrictive stipulation not justified by evidence of increased cumulative impact.

“It is the view of the ministers with regulatory jurisdiction for the Mary River project that this term and condition… is more onerous than necessary to mitigate potential impacts,” stated a letter signed by Aboriginal Affairs Minister Bernard Valcourt, explaining the restriction’s removal.

Amanda Hanson, review board assistant executive director, told Nunavut News/North in an email that the decision to reject the board's restriction on total iron ore production would not affect project approval.

The original Mary River mine project proposed in 2008 -- a $4 billion undertaking -- had received its project certificate in December 2012. Shortly after receiving that certificate, the company shifted gears in the face of a challenging investor market.

“In January 2013, Baffinland advised the NIRB that, owing to business factors, it was looking to go ahead with a different development plan,” stated Hanson in an email.

This altered plan involved trucking up to 4.2 million tonnes of iron ore per year from the mine site to Milne Inlet for shipment during the summer season from Milne Port.

“The board had not (at the time) considered the environmental impacts of this proposed development, and so undertook a reconsideration of the terms and conditions (of the) project certificate issued for the approved Mary River project,” said Hanson.

A year of technical hearings and reviews followed, including a January 2014 public hearing in Pond Inlet. Last month, the board forwarded its recommendations for the early revenue phase amendment to Aboriginal Affairs for ministerial approval.

Construction at the Mary River mine site began last spring. There are currently approximately 370 workers on site. More than 300 workers will be required once the mine is producing.

Total capital cost for the early revenue phase project is about $750 million. The company will begin mining this year, and hopes to be able to make its first open-water shipment of ore in 2015.

Regarding the larger overall project, Missal said the company remains optimistic.

“In order to get the project up and running we needed to start with this early revenue phase,” he said.

“Ultimately, we’d like to be in a position to develop the full project. Big projects get developed in phases or stages. This one is starting off very well.”