latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/canadian-funding-helps-restart-arctic-road-project-crucial-to-remote-mines-53865265 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us
In This List

Canadian funding helps restart Arctic road project crucial to remote mines

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020

Canadian funding helps restart Arctic road project crucial to remote mines

Canada's C$21.5 million in funding for a proposed all-weather arctic road project in Nunavut that would ease access to remote mining sites and Arctic communities could pave the way for a near "shovel ready" project in two or three years, said Scott Northey, COO of Nunavut Resources Corp.

Nunavut Resources is a subsidiary of the project's main proponent, the Kitikmeot Inuit Association, which applied for the funding through a federal infrastructure program. The government announced the funding on Aug. 13.

The potential road forms part of the Grays Bay Road and Port project and is considered by would-be Arctic miners as crucial to improving the economics of remote projects in Canada's far north and opening up ground for exploration. The road, expected to cost about C$500 million to build, would run about 227 kilometers from Grays Bay, on the shores of the Arctic Ocean, to the now-closed Jericho diamond mine near Nunavut's border with the Northwest Territories.

"We're optimistic that the next government, whether it be Liberal or Conservative, will be in a position to put a program in place to fund these sorts of nation-building projects," Northey said in an interview with S&P Global Market Intelligence.

The Kitikmeot Inuit Association and the Nunavut government submitted the project last year to the federal government for funding. However, it was denied after the Nunavut government withdrew from the project, citing financial considerations.

Nunavut permitting

Northey said about a quarter of the funding will back environmental assessment, while much of the balance will pay for geotechnical drilling to bolster bridge designs. Most of the project's fieldwork will start next year, and Northey said environmental assessment, which largely falls under Nunavut's authority, should take between 18 and 24 months to complete.

Project proponents say support for the road is strong. Jim Stevens, project director of the Grays Bay Road and Port project, which is part of Nunavut Resources, and Nunavut's former Deputy Minister of Transportation, said there is broad backing for the project in Nunavut given the road's potential to spur economic development. He noted the initiative was being driven by Inuit, removing some of the risk associated with possible indigenous opposition to the project.

"This is a project being done by Inuit, for Inuit," Stevens said.

Still, the proposed road passes through caribou territory and has drawn criticism from environmental groups who fear it may hurt herd numbers, among other possible impacts. "You need to consider the cumulative impact of building what's being self-proclaimed as a basin-opening road — in terms of the many offshoots that will happen, the many mines that will open up, the traffic being generated from those mines, including the traffic in the marine environment from ships," Brandon Laforest, an Arctic specialist with the World Wildlife Fund, told The Narwhal in a recent report.

One of the larger and more advanced mining projects that would benefit from a road is MMG Ltd.'s Izok Corridor copper-zinc project that comprises the Izok Lake and High Lake deposits. The deposits hosts resources of 15 million tonnes grading 13% zinc and 2.3% copper and 14 million tonnes grading 3.8% zinc and 2.5% copper, respectively, according to the company. MMG has said the multibillion-dollar project would require a 325-kilometer all-weather road and access to a deep-water port on the Arctic ocean to go ahead.

"The primary challenge that remains for the project is the substantial infrastructure required to develop this project in the Arctic," MMG states on its website.

Northey also said the Kitikmeot Inuit Association is liaising with the Northwest Territories, where another proposed road project recently received C$30 million in federal funding for similar preconstruction work. "We're coordinating with the government in Northwest Territory only insofar as we don't want to not meet in the middle," he said.

As it stands, the Grays Bay Road and Port project would connect with a winter road that runs south into the Northwest Territories from Jericho. But should both projects get funding and approval they could link, bringing all-weather road access to Nunavut from the Northwest Territories and a swath of remote projects.

Assuming it gets approval and funding, Stevens, who has managed construction of other northern road projects, said it would take about three years to build.