Skip to content

From the Chamber of Mines: Tough year for mineral exploration and mining in Nunavut, Northwest Territories

Providing a simple guest editorial on mining in two territories is becoming increasingly challenging as Nunavut and the Northwest Territories develop their own character, regulations and approaches to mineral resource development.
Mineral exploration has been waning in the NWT and Nunavut over the past several years. Image courtesy of the NWT and Nunavut Chamber of Mines ᐅᔭᕋᐅᔭᓂ ᕿᓂᕐᓂᐅᔪᒥ ᓄᖑᑉᐸᓪᓕᐊᓕᖅᓯᒪᕗᑦ ᓄᓇᑦᓯᐊᕐᒥ ᐊᒻᒪ ᓄᓇᕗᒻᒥ ᖄᖏᖅᓯᒪᓕᖅᑐᓂ ᖃᔅᓯᐊᕐᔪᖕᓂ ᐊᕐᕌᒍᓂᑦ.

Providing a simple guest editorial on mining in two territories is becoming increasingly challenging as Nunavut and the Northwest Territories develop their own character, regulations and approaches to mineral resource development.

That being said, the common denominator for virtually everyone in the country, and also in both territories this past year, has been the effects of the Covid-19 pandemic.

They have been significant.

In the NWT, one diamond mine closed for several months, while the other two mines managed to sustain reduced operations in what may have been the worst diamond market ever. Sales and prices slumped while downstream factories and retail stores struggled to stay open.

On the other hand, Nunavut mines faced a much more favourable situation as gold and iron markets remained strong.

However, all mines still faced the significant challenges of dealing with Covid to protect their workers and local communities. Given its economic importance in the North, the governments declared mining an essential service, provided that the industry could demonstrate strong health protection systems. The mines’ strong efforts were successful. Workers from small and vulnerable Northern communities were sent home to protect them from the virus, and most continued to be paid. Some of our mines became the first employers in Canada to install their own Covid testing labs. All in, their careful actions satisfied public health officials to allow them to keep operating, which they managed with reduced workforces, stringent testing, and by flying workers to the mine sites socially distanced on chartered aircraft.

Mineral production statistics tell an interesting story. The Northwest Territories experienced a significant drop of nearly $400 million in value, which was expected with one mine closed and terrible diamond prices. Nunavut, however, saw an increase of almost $500 million due primarily to strong markets.

In either case, the losses and the gains are significant and will have their effects on the economies of both territories.

On the exploration side, dealing with Covid was more difficult. Exploration was not declared essential, nor were any federal Covid relief programs provided. Covid protocols for small tent camps needed to be developed. Because of their nearness to communities, several companies postponed their work to reduce the risk posed by the virus. Only those located in the most distant and remote regions like Nighthawk’s gold project in the NWT and Sabina’s gold project in Nunavut, were able to restart. Thankfully, by summer this year, the Covid concerns had been addressed successfully with public health officials, and most exploration was again underway.

So where do we find ourselves today?

All of our mines continue to operate this year. With their stringent health protection procedures, they are experiencing relatively minor Covid outbreaks in comparison to some communities and even provinces. In regards to sales, market prices for diamonds are strengthening, and gold is still strong. Iron prices are questionable.

On the exploration front, while it is again underway, much work is required to return it to the healthy levels required to sustain a strong and beneficial mining industry.

Both the NWT and Nunavut have lost significant position and are being outcompeted for investment by most provinces and other countries.

Remember, exploration is mostly unsuccessful. We need much more exploration today to increase the odds of making the discoveries that will replace the mines 15-20 years from now. To that end, work is needed to attract investment back to Nunavut and the NWT.

On the positive side, we do have several projects advancing closer to mining decisions. They would produce gold, which continues to provide strong prices, and/or critical minerals like rare earths, zinc, and cobalt. These are the very important metals required to address climate change with electric vehicle and alternative energy components. Exploration for critical minerals should get a boost, given that the recently elected federal government promised special exploration tax credits for critical mineral projects.

We can’t take increased investment for granted though. It won’t just fall into our laps.

To that end, our Chamber of Mines will continue to identify actions that all levels of governments can take to help support and to strengthen the North’s number one industry, and to the benefit of Northerners.