Features| Northern mining |
Northern mining industry growing fast
Jennifer Obleman
Northern News Services
NWT/Nunavut
Mining companies are expected to spend $225.2 million on exploration and deposit appraisal in Nunavut in 2007, marking the fourth straight year of significant growth since 2003, when the total was $92.7 million.
Mining North: Section A(8.3MB) Mining North: Section B (9.5MB) Mining North: Section C (6.5MB)
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The most popular commodity in the North is diamonds, with 2006 spending on exploration and deposit appraisal totalling almost $80 million in the NWT.
Precious metals, base metals and uranium are also being targeted.
Rising metal prices
Metal prices shot way up this year, along with exploration.
Gold was worth more than $770 an ounce this fall, after entering 2007 at just over $600 an ounce.
Bismuth was at $20 a pound and cobalt was at $29.50 a pound late in the year.
Uranium spot prices were also on the rise this year, hovering near $80 a pound in October, down from $138 in the summer, but much higher than the single-digit prices of the 1990s.
"It's 10 times what it was a few years ago," said Barry McCallum, manager of Nunavut affairs for Areva Resources, which is looking to develop a deposit near Baker Lake.
High metal prices have factored into proposals for redevelopment at the Lupin gold mine in Nunavut, owned by Zinifex Canada, and the Pine Point Mine near Hay River, a project being pursued by Tamerlane Ventures.
Tamerlane wants to build a test lead/zinc mine 42 kilometres east of Hay River, where a one-million- tonne test sample would be mined over a period of 12-15 months following 12-15 months of construction.
If the test mine is successful, Tamerlane plans to mine a further 70 million tonnes in 34 known deposits on the Pine Point property.
Exploration challenges
Because of the surge in exploration in the North and around the world, both skilled workers and drills are at a premium.
"We're having trouble getting drill rigs," said Zinifex Canada president Ewan Downie. "Metal prices are strong so more people are looking."
Another challenge exploration companies are facing is a lack of infrastructure ‚ a worry compounded by the threat of another short winter road season.
The NWT's "dysfunctional" regulatory system is also an issue, according to Canadian Zinc Corporation director Dave Nickerson.
"If we decide we want to continue the mining industry in the NWT, that's the most important thing we need to work on," Nickerson said.
Despite these hurdles, exploration in both the NWT and Nunavut has been on the rise in the last decade. In 1997, there were 58 operators on exploration projects in the two territories. In 2006, there were 82.
Junior companies were responsible for more than half of the exploration spending in Nunavut and about 70 per cent of spending in the NWT this year.
Moving forward
At the start of this year, there were three producing mines in the NWT: North American Tungsten's CanTung mine, BHP Billiton's Ekati mine, and Diavik Diamond mine, a partnership between Rio Tinto and Aber Diamonds; and one producing mine in Nunavut ‚ Tahera's Jericho mine.
Tungsten production in the NWT in 2006 totalled almost 238,000 tonnes, worth $51.4 million. Diamond production totalled close to 13 million carats, worth $1.6 billion in the NWT and 296,000 carats, worth $29.2 million in Nunavut.
With De Beers Canada's Snap Lake mine, 220 kilometres northeast of Yellowknife, slated to start production in 2007 and potential developments such as Fortune Minerals' NICO cobalt- gold-bismuth deposit north of Behchoko, Baffinland's Mary River iron deposit south of Pond Inlet, and Agnico-Eagle's Meadowbank uranium site north of Baker Lake expected to advance in the next few years, production numbers and values are likely to climb even higher.
-with files from Paul Bickford
-Updated November 15, 2007
