Nunavut open for business (September 17, 2001)

In two short years since the creation of Nunavut in April 1999, our government has begun to make significant changes in the way business is conducted in the territory.

Transforming Nunavut’s unrivalled mineral development potential into opportunities for the people of Nunavut and Canada is certainly one of our challenges. During this endeavour, we must also be cognizant of something known as the industry’s “social licence,” or the need to develop viable projects within a sustainable context.

The mining industry must earn the support of its stakeholders — the communities in which it operates, its employees and aboriginal people whose land may be developed. In order to succeed, the industry must strengthen its partnerships with all those with an interest in mining and its performance.

The government of Nunavut knows that in order for it to succeed in developing mineral resources, we must also embrace these partnerships.

Nunavut encompasses nearly two million square miles, a remarkable one-fifth of the entire country. One need only scan Nunavut’s landmass and geology to envision its potential in gold, lead, zinc and diamonds. Moreover, this potential is virtually untapped.

Mining is Nunavut’s largest wealth-creating industry and it holds the greatest opportunities for employment and business development in many local communities. One of the most attractive elements to investors is the certainty provided by the signing of the 1993 Nunavut Land Claims Agreement. This agreement provides for a clear and concise development process that includes the Inuit of Nunavut as participants in the development of the territory, socially, politically and economically.

With the establishment of such participation agreements, more of the money from mining will remain in Nunavut and benefit its peoples.

Recently, there has been an increase in the attention being paid to mineral exploration in the territory. We’re open for business, and the prospects are positive. But our government is also taking steps to ensure that the lives of Nunavummiut are not negatively impacted through resource development. Many of the decisions that have been made during the past two years reflect a philosophy of sustainability. In fact, responsibility for the mining sector within the territory falls under the Department of Sustainable Development, which is also responsible for the environment.

The government is committed to fostering an economic milieu that encourages development and prosperity while encompassing respect and protection for our residents, traditions and environment. It’s a delicate balance between creating a sustainable mining industry yet maximizing our resources potential.

The mining industry is poised to contribute a solid foundation for a strong and diversified economy. It has been established that the natural capital — in this case, the grade and tonnage of our raw resources — is present in Nunavut.

The ability to mine these resources and the infrastructure needed for that task relate directly to our natural and physical capital. Currently, the national infrastructure program is funded on a per capita basis. That means Nunavut, with a population of about 30,000 and one of the areas of the country in most need of infrastructure development, is allotted a mere 1/16 of 1%, of a nearly $2.5-billion program. We are working with the mining industry, as well as Inuit organizations in Nunavut to identify opportunities for feasible infrastructure development in Nunavut. The Bathurst Port and Road Project, which would support the Hope Bay gold project, the Izok copper-zinc project, and other projects in the Kitikmeot, is one example.

We have also created the Canada-Nunavut Geoscience Office in partnership with Natural Resources Canada and the Department of Indian and Northern Affairs. The office supports the development of basic geoscience infrastructure essential to mineral exploration through topographic mapping projects and public geoscience.

Another pillar of mining and sustainable development relates to society. Mineral exploration and mine development must provide substantive and sustainable benefits to affected people and communities. This is the human, social and organizational investment that will increase in value through direct employment, training and business opportunities.

To this end, we are developing our capacity through a Prospector’s Assistance Program. This program includes courses and contributions of up to $5,000 for prospecting, staking claims and collecting rock samples, along with direct technical support in the field. Hunters, who spend countless hours on the land, have taken advantage of this program, resulting in some interesting and potentially significant mineral discoveries.

Currently, there are three operating mines in Nunavut: Polaris and Nanisivik, base-metal mines in the High Arctic, and Lupin, a gold mine in the Kitikmeot region.

Polaris and Nanisivik employ 450 people and generated revenues exceeding $350 million in 2000. The projections for 2001 are $400 million. The Lupin gold mine reopened this year and employs about 350 people.

Toronto-based Tahera has begun developing the Jericho diamond project in western Nunavut. Gold exploration remains a major focus, and Nunavut has three of the largest gold exploration projects in Canada: Miramar and Hope Bay Resources at Hope Bay in the Kitikmeot; Western Mining at Meliadine; and Cumberland Resources at Meadowbank in the Kivalliq, the central region of Nunavut.

Major base-metal projects include the search for nickel and platinum group minerals by Starfield Resources at Ferguson Lake, and Muskox Minerals, south of Kugluktuk. Cominco and Noranda are involved in zinc and copper projects in the Arctic islands, while Inmet Mining holds the advanced Izok Lake copper-zinc project and is exploring lead-zinc deposits in western Nunavut.

Many new projects are likely to be fly-in/fly-out operations – a practice that speaks to sustaining the mining industry. Fly-in/fly-out operations will allow resident employees to remain in their communities and commute to the mine site. Such operations will eliminate the need to establish, and ultimately abandon, mining settlements. This will also instigate spin-off economies in existing communities.

And when mining operations cease, employees will have the education, skills and experience to seek new mining opportunities elsewhere in the territory.

The mining industry contributed $129.9 million to Nunavut’s gross domestic product in 1999 and there is every indication that figure will likely grow in the future.

The government of Nunavut is interested in working with the federal government, the private sector and Inuit organizations in the territory to overcome our challenges.

Under the current system, the majority of royalties accrued from mining development in Nunavut flow to the federal government. The expansion of the mining industry and the ensuing resources royalties would offer the Government of Nunavut the potential to negotiate a method to more directly share in new resource revenue.

Securing this revenue, especially with the renewed interest in resource development, would go a long way towards economic self-determination and allow us to increase our participation in the funding of resource development.

We are committed to working with our residents, Inuit organizations and the private sector to ensure we all benefit from mining development in the territory. Nunavut has the potential to be Canada’s treasure chest of mineral resources as long as we work together towards sustainable resource management.

— The preceding is an edited version of a speech given to the Mining Association of Canada at its annual meeting in Halifax, N.S., in June 2001. The author is the premier of Nunavut.