Baffinland gets federal approval for production increase with QIA's support

The federal government has approved Baffinland increasing its iron ore production against the advice of the Nunavut impact review board [NIRB].

In its recommendation to the federal ministers, who have final say on the file, the review board said it was concerned about the environmental impacts of hauling more ore from the Mary River mine to Milne Inlet.

It said there was not enough information about how the mine would manage marine protection with the increase in ships or the dust produced by more road traffic.

However, after the impact review boardgave its advice at the end of August, the Qikiqtani Inuit Association [QIA] wrote a letter to Northern Affairs Minister Dominic LeBlanc supporting Baffinland.

The letter was also signed by the Pond Inlet Hamlet and Hunters and Trappers Organization.

"This letter conveys our position that the 2018 production increase application and its associated impacts, monitoring programs and mitigation measures are reasonable particularly when considered in light of the QIA/BIMproject stabilization approach," it said.

More money to Inuit

The stabilization approach is part of the renegotiated terms of the Inuit Impact Benefit agreement between QIA and the mine, signedWednesday.

In the benefits agreement, Baffinland promises to pay out at least $5 million a year to QIA either in advanced payments or as a royalty percentage of production starting in 2019.

It also promised $10 million to design and build a training centre in Pond Inlet and to increase the Inuit training budget to $2.25 million annually starting this year.

Every three years Baffinland will purchase a research vessel and give it to one of the surrounding communities, with the idea that in 12 years, Pond Inlet, Arctic Bay, Clyde River, Igloolik and Hall Beach will each have one. A vessel will cost around $300,000.

Baffinland also put money into environmental monitoring, and pay for gas for Inuit to get around or for Inuit harvesters should wildlife loss occur because of the mine.

Balancing economic benefits, environment concerns

QIA's president PJ Akeeagok said these large monetary commitments don't come around very often, so it was comfortable with the production increase.

"We felt those trade-offs, I wouldn't call them trade-offs, but they're enablers for the community to feel confident about," Akeeagok said.

"Topics such as dust and marine mammals now have heightened monitoring and mitigation measures which the company had not previously committed to despite years of requests to do so," a QIA press release said of the agreement.

• Arbitration panel rules Baffinland owes QIA $7.3M in missed royalty payments

Baffinland's chief operating officer Brian Penney said the mine is committed to mitigating negative effects of the increase.

"With the dust as an example, in the last three years we've increased our production significantly year on year and and every single year, with more trucks on the road, we've decreased our dust," he said.

There is a dedicated road maintenance crew and the increased road traffic will take place when the road is frozen, so no dust, he said.

The shipping season is also shorter, with more ships in a shorter amount of time all of which must slow down entering the inlet.

This year there will be 11 more ships, bringing the total extracted ore for 2018 to five million tonnes. Penney says he hopes to ship out six million tonnes of ore next year.

Ministers weigh economics more than review board

The federal ministers' approval is only temporary, running until the end of the 2019 shipping season, after which production must drop back down to the previously allowed amount of 4.2 million tonnes.

• Baffinland Iron Mines expects to meet or exceed its annual haul allowance this year

However, Baffinland has applied to NIRB to make the increase permanent. It submitted additional information on its environmental management plans on Wednesday.

• Baffinland Iron Mines' phase 2 plan gets sent back to Nunavut Planning Commission

All parties say they support the NIRB process and that its environmental concerns were valid, but it possibly didn't have all the information.

NunavutPremier Joe Savikataaq said there was a communication issue between the board and the mine.

After hearing from the mine and reading QIA's letter, he wrote the federal ministers, asking them to make a decision quickly and saying he was worried about potential layoffs at Mary River.

"I never stated I supported the increase, I never had an opinion on which way the decision of the federal ministers should be," he said.

"I just encouraged them to make a decision soon not later because if the decision was later, if the shipping season is closed, then it doesn't matter if it's a 'yes' anymore because Baffinland can't ship any more."

• Baffinland lays off 23 people, but hires more Inuit workers

The Nunavut Impact Review Boardhas not seen either QIA's or the premier's letter, but said the ministers were within their rights not to follow itsadvice.

"The ministers' difference in terms of outcome...is based on the ministers' difference in emphasis on socio-economic benefits associated with the production increase," Ryan Barry, the review board's executive directorsaid in a statement to CBCNews.