All of the N.W.T.’s diamond mines are aging. Arctic Canadian Diamond’s Ekati could close as soon as 2024 unless its Point Lake extension, expected to feed the operation until 2028, is approved. Gahcho Kué, owned by De Beers and Mountain Province Diamonds, is slated to run until 2028.
With natural resources making up 21% of the territory’s GDP (a proportion that was as high as 50% only a decade ago), a future without diamond mines is a bleak one to contemplate for the N.W.T.
Tom Hoefer, executive director of the NWT & Nunavut Chamber of Mines, recalls that the discovery of diamonds in Northwest Territories and the opening of Ekati, the first diamond mine in 1998, came along at a time when the territory faced similarly grim economic prospects. The industry was born at the same time the gold mines around Yellowknife shut down, and Nunavut was created, taking with it the Lupin mine. Now, the territory has four advanced projects — all of them critical mineral projects that could help meet burgeoning demand for high-tech and clean technologies. Can the push for critical minerals — which the federal government has belatedly started to pay attention to — help replace those revenues?
Even if all four are developed, Hoefer says they won’t make up for what N.W.T. is losing with Diavik alone.
“When you look at all four of our critical mineral mines that are that are moving closer towards becoming mines — Nechalacho, NICO, Prairie Creek and Pine Point — the workforces that they are projecting to have all added up don’t equal the workforce at Diavik,” he told The Northern Miner, referring to projects being advanced by Vital Metals, Fortune Minerals, NorZinc and Osisko Metals.
That means the N.W.T. needs to keep feeding the pipeline with new discoveries. However, the share of Canada’s exploration spending that both N.W.T. and Nunavut attract has been trending downward for the past 20 years. (The Yukon, which moved up from No. 18 to the No. 9 jurisdiction for mining investment globally in the Fraser Institute’s most recent survey, has been faring somewhat better.)
Feds show mining some love
In early April, the federal government released what Mining Association of Canada’s vice-president economic and northern affairs, Brendan Marshall described as a “vision budget” for the mining sector. In it, the government pledged to invest $3.8 billion in critical minerals over eight years, with funding proposed to support “priority projects,” critical mineral supply chains, infrastructure, research and geoscience to aid exploration.
With this proposed spending, mining is finally being recognized as critical to the planet’s future — and not as a relic of its past.
And while the budget itself didn’t include any specific help for mining in the Far North, Federal Transport Minister Omar Alghabra was recently in Yellowknife promoting its contents. The minister’s visit seemed to signal that, when details of the spending outlined in the budget are released, they will benefit the north, where mining is a crucial part of the economy and has supported the growth of Indigenous businesses, expertise and employment.
“We’re very interested in what the budget has in it ‘cause it’s got a lot of great words,” Hoefer said. “It’s something that we want to investigate with the federal government to make sure that those great words are applied in the North as well.”
Barriers to development
Mining in the North is unforgiving. A problem that could be overcome if the mine were located in a lower-cost jurisdiction can easily become fatal for a Northern operation. Hoefer notes that until the 1970s, the federal government used to provide funding for essential infrastructure such as airstrips, roads, other infrastructure and even direct mine investment. While that might be a hard sell for a government that has largely ignored mining until now, there are things that it could do to remove some of the barriers to developing new mines in the North.
For one, the three premiers of the territories have been lobbying for an enhanced mineral exploration tax credit created for work done north of 60°. The recent federal budget did contain a widely applauded doubling of the mineral exploration tax credit to 30% for critical minerals. But the Critical Mineral Exploration Tax Credit, which can be applied a number of minerals including nickel, lithium, cobalt, graphite, copper, rare earths elements, zinc, platinum group metals, and uranium, still leaves the North disadvantaged.
“In the North, we’re not like B.C. or Ontario or Quebec where we have enough of a tax base that we can offer our own flow-through regime,” says Mike Burke, a director of the Yukon Chamber of Mines and former head of mineral services for the Yukon Geological Survey who also has experience with juniors exploring the territory. “So the North has always been lobbying to have some sort of flow-through tax credit regime that that they could use. Investors in the Yukon can still invest in flow-through shares, but they only get 100% tax credit, whereas in B.C. it’s 133%-plus now with the critical minerals credit,” said the geologist.
Permitting is another area that the federal government could help make more efficient. The Yukon government is currently drawing up a modernized mining act to replace the Quartz Mining Act and Placer Mining Act, which both have roots in regulations enacted in 1898. On the federal side, Burke notes that YESAB — the Yukon Environmental and Socio-Economic Assessment Board — an independent body with federal, territorial and Indigenous representation, was created by federal legislation. Finding a way to speed up YESAB’s slow pace of project assessments, without compromising on environmental oversight, would need federal attention.
“They’re not meeting legislated timelines and reviewing projects. Over the years, there’s been a bit of a slow creep with that,” Burke says. “If we could put more effort into approving timelines and rolling things out in a quicker manner, that would help.”
Equally important, there are new infrastructure projects in the planning stages across the North that will need billions of dollars funding. For example, the proposed Gray’s Bay project would see an Arctic Ocean port built in Nunavut, along with a road connecting to the Northwest Territories border. On the N.W.T. side, a new Slave Geological Province all-season road would be built to meet up with the Nunavut infrastructure.
“This would provide lots of access to this very rich geological province and at the same time lower costs,” says Hoefer.
Another argument for special attention to the North is the budget’s emphasis on Indigenous participation in and benefits from resource development, with funding earmarked for the development of a National Benefits-Sharing Framework for natural resources, and the expansion of the Indigenous Partnership Office and the Indigenous Natural Resource Partnerships program.
“That’s something we’ve been doing for a long time up here in the North,“ Hoefer says. “We’ve got some phenomenal Indigenous companies that have grown up with diamond mining and are very successful as a result… That’s another reason why we would emphasize we need to get these four [N.W.T. critical mineral] projects to become mines.”
With the federal Liberals having struck a deal with the NDP to keep their minority government in power until 2025, they have plenty of time to turn their words into actions that could help support the Far North economy.
