Baffinland requests further production increase at Nunavut iron ore mine

A helicopter passes over excavation equipment at the Mary River exploration camp, the site of a proposed iron mine on northern Baffin Island, Aug.17, 2006. (THE CANADIAN PRESS/Vinne Karetak)

POND INLET, Nunavut — The owner of an iron ore mine on the tip of Baffin Island says it needs to again increase production to prevent job losses, and several federal cabinet ministers are calling on a Nunavut environmental assessment agency to prioritize the request.

Baffinland Iron Mines Corp. wants to increase the amount of ore it's allowed to truck and ship from its Mary River mine to six-million tonnes, from 4.2 million, for both 2023 and 2024. It says the increase is needed to ensure a stable supply of iron ore to customers and that if it's not granted, it will have to scale back operations, including reducing employment.

The company is also requesting that, beyond the six-million tonnes, it be allowed to ship ore that was stranded at the Milne port last year, as well as any that could be left behind at the end of this year's shipping season due to "unexpected circumstances." It said that last year, large volumes of early sea ice in Milne Inlet resulted in shipping operations having to end several weeks early.

Baffinland has asked the Nunavut Impact Review Board to make a recommendation on the request by August.

In a letter sent to the review board last week, Northern Affairs Minister Dan Vandal, alongside other relevant federal ministers, said Baffinland's timeline was "reasonable" and the request should be made a priority.

Baffinland was previously granted approval to extract, transport and ship up to six-million tonnes of ore from the mine in 2018, while it awaited a decision on a separate proposal to increase production to 12-million tonnes as part of long-term expansion plans at the mine. The temporary production increase was extended until the end of 2021.

When Baffinland requested a further extension in 2022, it said it would have to lay off nearly 1,200 employees once the limit of 4.2 million tonnes was met. When the extension was granted in October, the company said it was rescinding all termination notices.

The following month, federal ministers rejected Baffinland's request to double production at the mine to 12-million tonnes, in line with a recommendation from the review board, citing concerns about potential negative environmental and socio-economic impacts.

Baffinland's long-term expansion proposal included plans to build a 110-kilometre railway north from the mine to the port at Milne Inlet.

The company has said it is now considering constructing a railway south from the mine to Steensby Inlet. A proposal for that project was approved in 2012, but Baffinland did not pursue it due to funding concerns.

Several governments and organizations have written to the Nunavut Impact Review Board in response to Baffinland's recent request to increase shipping to six-million tonnes until the end of 2024.

The Nunavut hamlets of Arctic Bay, Pond Inlet and Sanirajak, as well as the International Union of Operating Engineers and the Ikajutit Hunters and Trappers Organization in Arctic Bay, have indicated they support the proposal.

A letter from Arctic Bay states the proposal is "essentially the status quo" and expresses concern that any reduction in Baffinland's ability to raise capital for a southern railway could result in reduced benefits for the hamlet.

"The Hamlet of Arctic Bay has many residents working at the Mary River Mine. Anything and everything that could result in loss of employment to our residents could cause great economic impact on having local people trained and local people employed," the letter states.

The Municipality of Igloolik and the Sanirajak Hunters and Trappers Association said they would also support the proposal if a baseline study is completed for marine and terrestrial wildlife around Steensby, communities affected by shipping are given additional benefits, and communities are consulted.

The Igloolik Hunters and Trappers Organization said it does not support Baffinland's request due to the short notice.

Oceans North, the Municipality of Clyde River and the Mittimatalik Hunters and Trappers Organization in Pond Inlet expressed concerns about the effects shipping could have on marine mammals and harvesting, and called for an assessment and public hearing on the production increase.

A report published by working groups from the North Atlantic Marine Mammal Commission and Canada/Greenland Joint Commission on Beluga and Narwhal earlier this year states increased shipping traffic from the mine is "by far the most likely cause" of declining numbers of narwhal in Eclipse Sound. It said this could result in long-term consequences.

Baffinland, however, has questioned the findings, saying the report did not consider the effects of other activities and the company was not invited to share its research.

The Qikiqtani Inuit Association and Nunavut Tunngavik Inc. raised concerns about the numerous short-term regulatory applications Baffinland has filed regarding the mine over the past eight years, saying it had resulted in cumulative effects not being adequately monitored. The Inuit association said following the current request, Baffinland should submit a longer-term or ongoing application accompanied by a comprehensive cumulative effects assessment.

This report by The Canadian Press was first published April 25, 2023.