Later this month, the Nunavut Impact Review Board (NIRB) resumes hearings on Baffinland Iron Mines Corporation’s “Phase 2” application to double production at its Mary River mine. This resource has the potential to create economic benefits for generations if managed properly. But a lack of transparency by the company on critical issues, and a lack of oversight by the federal government (who makes the final decision on authorizing this expansion), is depriving the public of their right to a fair process. At the same time, the company has minimized public concerns about the impact of dramatically increased shipping on marine mammals and other environmental concerns.
Baffinland’s true development plan is not clear. One the one hand, Baffinland has consistently told investors that once it wins approval to increase production to 12 million tonnes per year, it expects to increase output to 18 million tonnes through Milne Inlet. Yet Baffinland tells a different story in the North, while failing to explain this much bigger expansion plan to the NIRB. And responsible government departments appear content to allow this major contradiction to go unchallenged.
Baffinland has already spent over $700 million on Phase 2, buying railroad and port equipment and entering into construction contracts as far back as 2017. No wonder frustrations with this review process continue to boil over. How can participants have confidence in an assessment process when the proponent acts as if the result is predetermined?
Baffinland claims that the Phase 2 expansion is necessary for the commercial viability of the Mary River mine, yet its own financial reports to investors show that this is not the case; in 2018, Baffinland’s operating costs were below $50/tonne. Independent economic reports commissioned by Oceans North show that Mary River is a profitable mine. Baffinland and its proxies attack these economic analyses, without offering an alternative consistent with mining industry accounting principles, and without factoring in the $700 million (and counting) Baffinland spent on Phase 2. A profitable mine can be owned by a company that loses money because of poor decision-making.
Baffinland is also not transparent about its transportation plans. At the Phase 2 hearings, Baffinland said that it has to build the railway to Milne Inlet and expand that port before it constructs the longer southern route to Steensby Inlet. But communities are right to be skeptical: Baffinland already won permits to ship 18 million tonnes per year through the Steensby route in an earlier NIRB process in which the company failed to disclose their internal decision to ship iron ore out of Milne Inlet. Why should communities now accept the need for two railways and two industrial ports for this project?
Baffinland argues that its operations do not and will not have a significant impact on wildlife. Hunters, including elders, say the opposite: current shipping is already having a detrimental effect on both marine and terrestrial wildlife. With the exception of Baffinland’s interpretation of its own studies, the available science supports this concern. Research performed by the Scripps Institution of Oceanography in collaboration with Oceans North suggests that we don’t know enough about current impacts on marine mammals to support Phase 2 and the potential doubling or tripling of shipping through Tallurutiup Imanga, a national marine conservation area communities fought to protect.
The high-quality ore at Nuluujaat (Mary River) requires less energy to produce steel and should be marketed as an environmentally responsible alternative to lower quality iron ore. But it’s only a responsible alternative if Nunavut’s wildlife and harvesting interests are protected. Baffinland’s current development plans fail to do this, and it’s no small wonder that the company has lost the trust of communities and their representatives.
In 2016, the federal government committed to implementing the UN Declaration on the Rights of Indigenous Peoples. This includes a commitment to free, prior and informed consent in the review of major projects such as Phase 2. In a time of reconciliation, the federal government should not endorse a proposal (or a process) that pressures communities, lacks transparency, and presents profound environmental and social consequences. It’s time for government to listen to community concerns and stop propping up a bad deal for Nunavut and Canada.
Chris Debicki is vice-president of policy development and counsel for Oceans North.