The NWT and Nunavut Chamber of Mines is taking the Mackenzie Valley Land and Water Board (MVLWB) to court over its policy of limiting land-use permits to one extension.
The board’s decision to restrict extensions for resource development projects forces companies to expend significant resources and finances to apply for new permits, the chamber said in a news release on May 26.
The chamber filed an application for the review with the NWT Supreme Court on May 26, calling for the annulment of the board’s April 22 decision on its interpretation of the Mackenzie Valley Land Use Regulations and for the permits to be extended more than once.
The chamber also criticized the timing of the board’s decision, coming while the NWT faces “serious economic decline due to its ailing minerals industry,” a circumstance predating the COVID-19 pandemic.
“The Mackenzie Valley Resource Management Act (MVRMA) was not intended to require proponents to reinvent the wheel and expend significant resources (often in the hundreds of thousands of dollars) to apply for a new permit every seven years if nothing has changed and circumstances necessitate an extension,” the chamber stated. “The intent of the chamber’s application is to improve regulatory certainty and efficiency, and still respect the letter and spirit of the MVRMA, to protect the environment and contribute to economic prosperity in the NWT.”
‘NWT failing people and mining sector’
The board’s decision on permits makes an already complicated process even worse, said 60 North Gold Mining president Dave Webb.
His company is preparing to begin drilling for gold in June at its Mon Property, 45 km north of Yellowknife. It is the only miner in the NWT currently permitted to drill and extract gold.
Webb said that while the chamber’s legal action over the MVLWB’s policy is new, his frustration over the policy isn’t, and he has been discussing the issue with the chamber for more than a year.
“(60 North) obtained its initial permits in 2013 and 2014, got one extension, and had to apply for new permits before we had one truck or one shovel on the property,” he said. “These new permits were initially discussed with the MVLWB in 2019, submitted in early 2020, and received in December 2020. It took almost one year to get through a process to grant us the same permits we had at the time of the submission. This is our time, the board’s time, the 20 or more advisers, reviewers, First Nations (and) consultants’ time.”
Webb is concerned about the effects of the extension policy on mining operations as he wants mines to be “long-lived generational” projects.
“Restricting mine permits to five to seven years is ridiculous. Mines are asked to invest hundreds of millions of dollars that is amortized over decades based on permits that are only valid for a relatively short period.”
Pointing to Fortune Minerals’ cobalt-gold-bismuth-copper NICO project, about 160 km northwest of Yellowknife, Webb said that company must raise about $500 million to start a 25 to 30-year operation.
But short-term permits pose roadblocks for investors, he asserted.
“They tell their investors that they can get a five-year permit with a one-time two-year extension, and then they have to apply again to keep going. Very tough to do, and no major investor will accept that,” he said. “The new permits are not guaranteed. The risk is too great for most normal projects. Ours is very small, and we can use equity to fund our plans – very few companies can do this.”
He expressed further disappointment that the permit policy shows the NWT is “clearly failing its people and the mining sector” and hopes that procedures for obtaining permits can become more streamlined.
More flexibility to benefit small companies
The De Beers Group, which has 51 per cent ownership of the Gahcho Kue diamond mine, supports the position of the chamber in seeking a more flexible approach from the MVLWB when there would be no material changes to projects, said spokesperson Terry Kruger.
“The proposal by the chamber of mines is that this flexibility would be of particular benefit to small exploration companies who may not have the level of resources in order to advance land-use permit renewals – as do larger mining companies – and who were not able to carry out fieldwork during 2020 due to the COVID-19 pandemic,” he said.
A spokesperson from the MVLWB did not respond to a request for comment by press deadline.