The Canadian Mining Journal is Canada’s first mining publication. This article is from the magazine’s May, 2011 issue.
Why is NWT exploration slowing so drastically?
Grassroots explorers shun the NWT, discouraged by high cost, scant infrastructure, a regulatory system that’s still a work in progress, and two land claims
It’s not much of a dip — only $2 million from 2010 — but a new forecast for exploration spending in Canada confirms that mine finders have found friendlier places than the Northwest Territories to spend their exploration budgets.
Natural Resources Canada reported the trend in March, predicting the NWT will see only $83 million invested this year, less than half the money invested just five years ago.
Contrast that with Yukon’s projected $256.3 million this year, or Nunavut at $327.8 (up an eye-popping 71 and 24 per cent respectively from 2010) and it’s easy to see why the NWT should be worried, if not alarmed.
“The challenge is we’re facing a maturing [diamond] industry and it will take many [conventional] projects to replace an Ekati-size mine,” says Tom Hoefer, Executive Director of the NWT & Yukon Chamber of Mines. Currently, the territory has only four producing mines — three diamond, and the other, tungsten.
Naturally, the recipe for a sustainable mining future is to see lots of healthy exploration projects today to beat the 1000-to-one odds of finding a viable mine.
“This is worrisome because the consequence of languishing exploration is suffered years down the road. It takes a lot of years to bring a mine on. It’s not a light switch,” says Hoefer.
Regulatory Roadblocks Blamed
Miners have always felt the bite of the North’s high cost of operating, coupled with a sparse road and power infrastructure that hasn’t seen any major new investment since the mid-1990s. Along with a young and under-educated population, the 1.14 million square kilometre territory does not have the kind of mining-friendly climate that Yukon and Nunavut have cultivated.
But increasingly, the biggest target of the industry’s frustration is the NWT’s labyrinth of federally controlled development boards. This patchwork of uncoordinated, inconsistent, sluggish and expensive processes is cited as the main reason they’re pulling up stakes, often in favour of the two neighbouring territories.
Little wonder. There are now some 16 federal boards and agencies with some role in NWT resource management. Some have national jurisdiction, while others — the regional land and water boards — are mandated by four land claims agreements covering the northern half of the territory.
The North’s earlier licensing boards were largely made up of professional bureaucrats, engineers and business heads who understood what industry wanted and used science to design permits that, arguably, protected the environment. Aboriginal voices and consultation were rare.
Today’s new co-management boards are a blend of community-based appointees, along with an equal number of government seats. Gone is the business and pro-development board model, replaced with strong traditional values and a decided lean toward preservation and protection first.
Zabey Nevitt is one of the first people who’ll acknowledge the system isn’t working the way it was envisioned a decade or more ago.
“The boards were established at different times, in different ways, and they did things slightly differently… we’ve made some different decisions along the way,” he admits.
Nevitt, an environmental engineer from England who came to Canada 15 years ago first as a teacher, is now the Executive Director of the Mackenzie Valley Land and Water Board (MVLWB), an umbrella agency set up in 1999 to help coordinate the work of regional boards.
While he accepts the system has serious flaws, he deflects the widely held view that it’s broken. “It’s simply an incomplete system — we just don’t have a finished system in the NWT,” he says.
But there are two protracted barriers to being able finish it: achieving land claim settlements in the vast Deh Cho and Akaitcho regions. Together they comprise the southern half of the NWT, and until they’re settled, will continue to hobble some of the best mineral potential in all of Canada.
No Claim, No Say, No Go
Nevitt points out that in the three settled claim areas he deals with — the Gwich’in, Sahtu and Tlicho — the process of handling permit applications through the regional boards is relatively smooth. These boards, with strong representation from their regions, can help bring solutions to the table with developers with authority and confidence.
But in the Deh Cho and Akaitcho regions, in the absence of a claims agreement and regulatory board, it’s the MVLWB that assumes the process. And for those regions, that’s the rub.
“Where the people affected by the decisions do not feel they have an adequate or participatory voice in making those decisions… they feel that the MVLWB is an imposed system,” says Nevitt.
“So until those claims are dealt with, you will have aboriginal groups standing up and saying, we don’t support the project because we don’t have a hand in the decision making.”
Bertha Rabesca-Zoe is a Tlicho lawyer, the first of her people to earn a law degree, and has been immersed in claims and negotiations for years. She’s adamant that these claims have to be resolved before any real progress can be made toward a truly integrated NWT resource management system.
“Because they don’t have a land claim, they’re asserting their treaty and aboriginal rights… They’re going to be very aggressive, and it’s politically challenging. Until these two regions are settled, and have a defined agreement, you’re always going to have these unsettled issues.”
In the meantime, they walk a thin line between holding out for what they want in a claim, yet having to be engaged in development that can still legally proceed. Ironically, the Yellowknives Dene (part of the Akaitcho First Nation) have embraced the business opportunities spun from the diamond mines, invested in businesses and have service and materials contracts that employ hundreds of their people, generating almost $30 million revenue in 2009.
The regions have applied some innovative tactics to stall projects they deem unwanted, or that may threaten their claims negotiations.
Even tiny grassroots applications have found themselves bumped (or threatened to be bumped) to the vastly complex and expensive Environmental Assessment process. The Akaitcho have demanded arbitrary “exploration agreements” from juniors, including community consultation meetings or scholarships billed at up to $25,000 before a boot is allowed on the land.
Another more recent tool is the application of “significant public interest” and the duty of the Crown to consult adequately with First Nations. One explorer, North Arrow Minerals, went to court against objections raised by Akaitcho, and lost on the grounds that neither they nor the Crown (the federal government) had properly talked the plan through.
And no less a celebrity than Ice Road Trucker Alex Debogorski, wanting to try his hand at a small drill program for diamonds, was shut down in early 2011 over demands for community consultation and research.
“The tasks are scaled way too high, not scaled appropriately to the size (or the timing) of the project… it’s mismatching expectations,” asserts Hoefer.
He hopes that over time, and with more experience, communities and governments will appreciate the cause and effect of locking up too much land. “We need to find a balance in there that’s different than what we have today.”
Positive, but Glacial Progress
While both the Akaitcho and Deh Cho claims are under negotiation, progress is measured in tiny steps over months and years. But the MVLWB and others are doing something about the issues now.
One step is the NWT Board Forum, a strategy, policy and training agency that pulls together the 16 existing boards and agencies. The Forum looks for common ground, overlaps and conflicts in their jurisdictions, and tries to iron them out.
Recognizing the mining issues, the MVLWB and the three regional boards have, since 2007, been working on six areas of chronic and common confusion. They include water and effluent policy, closure and reclamation plans and a standardized approach to completing applications, earning praise from national and territorial mining interests, says Nevitt.
The persistent complaints about the regulatory tangle have even spurred federal action, including the 2008 McCrank Report on regulatory reform. But it met with, at best, scepticism from First Nations, especially its contentious recommendation to centralise decision making and wipe out the regional bodies.
It took two years for INAC Minister at the time, Chuck Strahl, to respond. Two years later, in June of 2010, he injected some $19 million into it, and announced the appointment of John Pollard, a Hay River businessman and former NWT finance minister, as a special chief negotiator to iron out McCrank’s recommendations. New INAC Minister John Duncan has yet to announce any progress.
Northerners long for the kind of leadership that will stir the First Nations and territorial and federal governments out of the regulatory quagmire. Current NWT Premier Floyd Roland, and Minister Duncan, appear to have lost the latest gambit: in January of this year, they signed a devolution agreement in principle with the support of only two claimant groups.
As of April 2011, their bold initiative had dissolved into a public squabble as the other claimants, and the Premier, slag each other in full-page newspaper ads every week or so.
But despite the brinksmanship at high levels, the urge to find mines will keep explorers interested in looking at the NWT’s highly prospective ground. And managers like Zabey Nevitt and Tom Hoefer share a common agenda in working out the best way to help them do it.
Hoefer says his Chamber wants to reach out and help industry, communities and boards work out what “better” looks like and to work towards it. “But there’s no magic bullet,” he says.
One of Nevitt’s own frustrations is that when an exploration company has regulatory problems, it will often go elsewhere to complain, and he doesn’t get the chance to deal with issues one-on-one.
“There’s this constant messaging that the regulatory system isn’t working, that exploration is pulling out because of the messaging they’re hearing.”
There’s the self-fulfilling prophecy that if you say it enough, it becomes real. There’s a lot at stake in the NWT if it does. CMJ