A Chinese state-backed miner owns the remote Izok Corridor in Nunavut, one of the richest zinc deposits in the world, and the Canadian government has provided some financing for the $1-billion Grays Bay Road and Port project (GBRP) running right to it.
The corridor, which is about 350 km from the nearest permanent road, has passed through the hands of several owners including Texas Gulf, Falconbridge and OZ Minerals before China Minmetals bought OZ in 2009. That was more than a decade before Ottawa hardened national-security reviews of takeovers.
In an era of threatened Arctic sovereignty, trade war battles over critical minerals and rising resource nationalism to tackle China’s dominance in nearly all things mining and mineral, some experts say the Nunavut road and port development is astounding. It’s like Ottawa is building for Beijing.
“There are significant national security risks with MMG,” Joshua Kroker, a research fellow at the Trent University linked-North American and Arctic Defence and Security Network, told The Northern Miner. “Even if the federal government approves the road, are they even going to approve these licences for mines, given the possible national security impacts?”
Road to resources
Of course the situation is complex. The list of previous owners shows how difficult it is to develop a base metals project when prices are low. And it highlights how the mining industry needs Chinese capital to develop mines where others fear to tread.
MMG spent more than $70 million in Izok Corridor studies and exploration in the region from 2009 to 2024, as well as a four-year commitment of $90 million to further advance the project.
The Hong Kong-listed company is aware of the optics of a Chinese-owned critical metals project in Nunavut.
“Geopolitics and minerals have always been complex,” Catherine Knight, MMG’s Vice President Canada, said in an emailed response to questions. “While MMG’s ownership structure—CMC is our major shareholder—presents some challenges in investment… we understand that any investment in Canada by MMG will be governed by Canadian laws and commitments to supporting Canada’s critical minerals policy.”
Ottawa has already used national-security review powers to nix a Nunavut mine transaction. In late 2020, Ottawa rejected the US$150-million takeover of TMAC Resources and its Hope Bay project by China’s Shandong Gold Mining. Agnico Eagle Mines (NYSE, TSX: AEM) later bought the asset.
In 2022, federal officials ordered three critical mineral companies to divest Chinese investors, and later diverted a stockpile of rare earths from Chinese control. In recent years, a few other firms have redomiciled to avoid Ottawa’s scrutiny.
As for how much Canada considers foreign ownership when evaluating support for a project like GBRP, The Northern Miner asked Natural Resources Minister Tim Hodgson’s office for comment.
“With regard to security, the Investment Canada Act provides for a national security review of any foreign investment into Canada, regardless of its value,” NRCan spokeswoman Maria Ladouceur said by email. “Due to confidentiality provisions of the Act, the government cannot comment on specific transactions.”
Grays Bay project
GBRP, whose sole proponent is West Kitikmeot Resources (WKR), would see a deepwater port on the Arctic Ocean, an airstrip and a 230-km all-season road running through Nunavut and into the Northwest Territories.
The road’s economic case is based on connecting projects like Izok Corridor that includes the High Lake deposit, Glencore’s (LSE: GLEN) Hackett River and other gold, copper and base metal deposits with the Grays Bay port. Construction could start in 2028 and be open to traffic by 2035, WKR said.
For the Inuit-owned WKR headquartered in Nunavut’s Cambridge Bay, the ideal outcome for mineral assets in the territory would be increased Inuit ownership, with Canadian coming second best.
“Unfortunately, it is true that there aren’t as many Canadian mining champions as there once were,” WKR’s Chief Operating Officer Elliot Holland said in an emailed response to questions. “But where a company keeps its corporate headquarters is less important than the benefits it provides locally.”
He cited the examples of foreign miners Rio Tinto (ASX, NYSE, LSE: RIO), BHP (ASX, NYSE, LSE: BHP) and Anglo American’s (LSE: AAL) De Beers, who have owned diamond mines in the N.W.T., significantly benefitting its economy.
“[GBRP] has three user groups: mining, community, and security users,” Holland said. “With respect to mining users, Izok Lake, High Lake and Hackett River are the most advanced projects and therefore the most likely mining users of the infrastructure.”
Another corridor
The road and port are also linked to The Arctic Economic and Security Corridor (AESC), a 400-km all-season road from the N.W.T.
In late June, Ottawa announced it’s considering granting national interest status to the GBRP and Mackenzie Valley Highway project, a designation that could push permits and approvals through the Major Projects Office.
“We are in a pivotal moment,” Hodgson said in Yellowknife. “We are facing a global energy crisis, we are facing attacks on our sovereignty, a changing global economic reality, a difficult security environment and major climate change. It’s time to build big things again, both quickly and responsibly, in partnership with Indigenous peoples.”
Prime Minister Mark Carney added Grays Bay and the AESC to the Major Projects Office in March.
Since 2019, Ottawa has committed about $29 million to planning and development work for GBRP and in May earmarked another $50 million through the First and Last Mile Fund. In total, both projects are estimated to cost at least $2 billion.
MMG said it’s providing funding and support for the road project through studies, data sharing and collaborating with the team, though Knight said she couldn’t give details due to their commercial sensitivity.
High-grade zinc
Izok hosts 15 million measured and indicated tonnes grading 13% zinc and 2.3% copper. High Lake, north of Izok, holds 14 million measured and indicated tonnes at 3.8% zinc and 2.5% copper, according to a feasibility study from 2012.
Despite its zinc-copper potential, the project was in 2012 deemed “uneconomic due to the high capital and infrastructure costs associated with the haul road and port facilities,” Knight said. “A great deal has changed since then. Most importantly, regional infrastructure is now progressing well through regulatory pathways.”
For N.W.T. leaders, they want Ottawa to treat northern roads and power projects as one Arctic buildout, not another stack of separate studies.
“There’s now a recognition nationally from the federal government that this country needs to build foundational infrastructure for the whole of the country,” Deputy Premier Caroline Wawzonek said from Inuvik. “We need to see ourselves as an Arctic nation.”
The Mackenzie Valley Highway would run about 800 km from Wrigley to Inuvik, starting with a 320-km link from Wrigley to Tulita and Norman Wells. Taltson would add 60 megawatts of hydro power and a 320-km transmission line to connect the N.W.T.’s North and South Slave grids for the first time.
“Having funds that are for the project as a whole rather than piecemeal is the goal,” Wawzonek said. “We want to build these projects as a group.”
The Grays Bay concept began in the early 2010s as a road to resources, then became associated with the Arctic Security Corridor and now sits within the AESC, said Kroker, author of a report on the corridor.
The Major Projects Office gives this version a stronger case, he said, but it doesn’t guarantee long-term money or mine demand.
“It definitely still needs the mines component,” Kroker told The Miner. “It still needs to be economically viable on its own. There needs to be people using it, because if there’s no economic use to it, eventually it’ll just kind of fall off.”
Churchill caution
Churchill, Man., offers a cautionary example of a northern trade and security project promoted as strategic before all the facts were in, according to Jackson Walling, a Trent University PhD candidate studying dual-use Arctic infrastructure.
A railway runs about 1,300 km from The Pas to Churchill, linking Prairie shippers to Hudson Bay. But the line and port have struggled to make money, Walling said. Its rail link faces chronic damage from thawing muskeg, Hudson Bay needs specialized vessels for dredging, search-and-rescue capacity remains thin and Indigenous representation is contested, he said.
“Who’s going to be maintaining it?” Walling asked of Grays Bay. “It’s great to say I’m going to make a road in practice.”
WKR’s Holland suggests that while security and sovereignty are worthy goals, jobs, access and development were the original motivations for the Grays Bay project.
“The federal government’s elevation of Arctic sovereignty is the final push to get this project into construction, but the concept started with Inuit leaders.”
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