Original Published on Jul 13, 2022 at 08:30
By David Venn, Local Journalism Initiative Reporter
Baffinland Iron Mines Corp. didn’t apply six months ago for an extension of the permit that has allowed it to ship more ore from its Mary River mine because the company did not know then whether it would need that extension, a company spokesperson says.
That decision led Baffinland to request an emergency order from the federal government in May to increase its shipping limit this year or suspend its operations for the balance of 2022, and lay off 1,300 employees and affecting the jobs of 400 contractors.
Since 2018, Baffinland has been operating under a temporary permit to ship six million tonnes of iron ore a year from its mine on northern Baffin Island. That permit expired at the end of December. Baffinland is now relying on its previous permit, which allows it to ship 4.2 million tonnes a year.
When Nunatsiaq News asked why Baffinland waited until May to apply for an extension, company spokesperson Peter Akman pointed to three factors: the pending decision on the company’s expansion plans for Mary River; the price of iron; and concerns the Nunavut Impact Review Board would have rejected the application anyway — on technical grounds known in the mining industry as “project splitting.”
Akman said the company had been expecting a decision on its proposed expansion of Mary River before its temporary permit expired. The expansion has been in the works since 2018, when Baffinland applied to the Nunavut Impact Review Board, the body that advises the federal government on development projects, for permission to do it. The plan includes shipping 12 million tonnes of iron ore per year out of Milne Inlet.
But the board’s review of that expansion saw multiple months-long delays because of COVID-19 and concerns from Inuit groups about the process.
The board recommended on May 13 that the expansion not proceed. Now, the final decision rests with federal Northern Affairs Minister Daniel Vandal. This week, he extended his timeline to make that decision, which was formerly expected in late summer, by 90 days.
If Vandal rejects the proposal, Baffinland has said it would consider shutting down the mine.
The price of iron also factored into the company’s decision not to apply for an extension.
On Dec. 31, when Baffinland’s permit expired, iron ore cost US$115 a tonne, according to tradingeconomics.com, a website that provides commodity prices and other international economic data.
Since then, prices have increased: The price on May 26 — the day Baffinland asked for the emergency order to increase its shipping limit — the price of iron ore was US$124 a tonne.
“With a negative [review board] recommendation report coupled with higher iron prices, in order to do everything we can to avoid the need to issue layoff notices to our employees, Baffinland made the decision to request an extension to the [permit to ship six million tonnes per year] while we await final determination from the minister,” Akman said.
Baffinland also wasn’t sure the review board would have considered a separate application to extend its temporary six-million tonne permit during the review process for its proposed expansion, Akman said.
He said that could have been seen as “project splitting,” which he described as “applying for a decision on a new project that is already under consideration in an existing application” — and not allowed by NIRB.
Baffinland has gotten one extension of its higher six-million-tonne shipping limit during the review process for its proposed expansion — in 2020.
Neither Akman nor Costello said if Baffinland had consulted the board at any point this year about whether applying for an extension would be considered project splitting.
Baffinland sent the review board a letter on May 20 to request its shipping limit be increased to six million tonnes from the currently approved 4.2 million tonnes for 2022.
That application is now being reviewed by the board, and entered the screening phase on June 6, according to a document filed on the board’s registry.
Original Published on Jul 13, 2022 at 08:28
Northern affairs minister extends timeline for decision on Baffinland expansion
By David Venn, Local Journalism Initiative Reporter
Federal Northern Affairs Minister Daniel Vandal has given himself 90 more days to make a decision on Baffinland Iron Mines Corp.’s Mary River mine expansion proposal.
The proposal, known as Phase 2, is to build a 110-km railway, increase its annual shipping output from 4.2 million tonnes to 12 million tonnes through the Tallurutiup Imanga National Marine Conservation Area and construct an additional dock at the Milne Inlet port. Vandal was originally expected to release his decision by late summer.
On May 13, the Nunavut Impact Review Board recommended the proposal be rejected, stating it might cause adverse environmental impacts that can’t be controlled under the company’s current proposal.
Vandal said in a Monday letter to Baffinland’s chief executive officer Brian Penney that the 90-day extension is necessary so Inuit have time to read the report from NIRB, the body that advises the government on the social and economic impacts of development projects in Nunavut.
The Liberal cabinet minister also said the extension will give Inuit more time to consider Baffinland’s current application to ship six million tonnes per year, which is currently before the review board.
Baffinland sent that application to NIRB on May 20 while awaiting Vandal’s decision on Penney’s request for an emergency order allowing the company to ship six million tonnes of iron ore in 2022, which Vandal later denied on June 1.
Baffinland has warned that without approval to ship six million tonnes this year, it would have to lay off hundreds of its employees.
“This extension will provide Inuit and others time to focus their efforts on the current [application], especially given the limited capacity of some groups during the summer months when many Inuit are on the land,” Vandal wrote.
Baffinland spokesperson Peter Akman told Nunatsiaq News the company welcomes the news that Vandal is “taking the necessary time needed to learn all the information and meet with all the stakeholder groups involved in order make an informed decision on our Phase 2 application.”
“Baffinland is committed to working with the federal government and all stakeholder groups to do everything possible to avoid the necessity of layoffs and to protect our employees and their communities,” Akman said.
He added that Vandal had sent a second letter on Tuesday to the review board, requesting a hearing on Baffinland’s request to increase its shipping limit to six million tonnes a year be “conducted in an efficient and expeditious manner” and a recommendation made by Aug. 26.
“We have been mining at six million tonnes since 2018. As we have stated previously, without this approval, Baffinland will be forced to drastically reduce our workforce in the fall,” Akman said.
This item reprinted with permission from Nunatsiaq News, Iqaluit, Nunavut