Leona Aglukkaq is a member of TMAC Resources’ board of directors. She’s a former MP for Nunavut and she served in cabinet. This op-ed appears with her permission and originally appeared in the Financial Post.
The federal government must soon decide whether to approve Shandong Gold’s acquisition of TMAC Resources. The test is whether the purchase is of net benefit to Canada, including economic benefits with no unacceptable risk to national security.
One might think approving a Chinese acquisition of TMAC, which owns the Hope Bay gold mine in Nunavut, might be risky. But as a Nunavut Inuk, as a TMAC director and shareholder, and as a long-time representative of my community in government, I can tell you the benefits are too great to pass up. The Nunavut government and Jeannie Ehaloak, MLA for Cambridge Bay, the Nunavut constituency that encompasses the mine, agree.
Nunavut needs the investment that Shandong will bring. This investment will help move my region toward economic sustainability. Having sat at the cabinet table when such decisions were being made, I would not support this transaction if I believed it undermined our national security.
Nunavut has the highest proportion of youth of any province or territory in Canada but the most limited opportunities for training and employment. This investment will see Hope Bay realize its potential, which is to be a very long-lived and profitable mine, driving multi-generational prosperity for the people of the Kitikmeot region of Nunavut.
TMAC is the largest private-sector employer in the region but it needs vital investment that has not been easy to come by. Shandong intends to inject much-needed new capital into the Hope Bay mine and will be studying the feasibility of expansion, a new processing plant, accelerated mine development and exploration that could significantly extend the operation.
The benefits of Shandong’s new investment to my community are many: supporting highly skilled, long-term employment with the potential of more jobs to come; investing in skills training for Inuit employees; maintaining and growing the significant contracting benefits to businesses serving Hope Bay, including local, Inuit-owned firms; continuing and eventually increasing the flow of royalties, fees and taxes to Inuit and territorial governments; maintaining a commitment to the highest standards of environmental sustainability and to the health and safety of its workers; and investing in community organizations.
Shandong is among the world’s largest and most experienced gold-mining companies. It has a successful joint venture with Barrick in Argentina. It has the financial resources to invest in growth at Hope Bay. As part of the proposed transaction, Shandong would expand its Toronto office to oversee any new project developments in North America.
The benefits of Shandong’s investment in Nunavut have a potential value of hundreds of millions of dollars. My community needs these benefits. We Inuit spent 30 years negotiating land ownership and management rights so that we can partner with resource-sector firms to develop our region. We don’t want to be dependent on government handouts.
The Hope Bay property will always be subject to significant oversight: it operates on Crown and Inuit-owned lands that are administered by the Canadian government, the Inuit treaty rights agency Nunavut Tunngavik Incorporated and the Kitikmeot Inuit Association. It is also subject to authorizations issued by the Nunavut Impact Review Board and the Nunavut Water Board, as well as federal authorizations under the Fisheries Act and Navigation Protection Act.
Various perceptions exist about the nature of China’s interest in Canada’s Arctic. It is important to understand how regional and federal regulatory bodies and laws control the land and waterways where TMAC’s mine is located. With all this oversight there would be no opportunity for Shandong to build strategic infrastructure unrelated to mining.
While Shandong is partly state owned, it is publicly traded and motivated by profitable growth for its shareholders, among them Barrick, the Caisse de Depot and Goldman Sachs Asset Management International. This is a commercial transaction.
I appreciate the government must do its due diligence. But any unnecessary delays in the process are a risk to the mine and the region. The company needs certainty about its future so it can order supplies that must arrive in the narrow window when seas are ice-free enough. Not getting these supplies can cause major disruptions to operations at Hope Bay and real economic hardship to those who depend on the mine for their livelihood.
In many ways, the future of Hope Bay will reflect the future of this region of Nunavut. There are few projects of the same potential size and scale. We need this project to succeed. After a global search that reached out to 76 different parties, we secured the interest of a committed and successful operator that will make the necessary investments to get the most out of this project.
My experience in cabinet taught me that, while Nunavut has great mineral wealth, it’s not easy to find companies willing to invest in, explore and sustainably develop that resource potential. A global mining company has stepped up and is ready to invest hundreds of millions of dollars in the economic future of my community. I welcome this company and its important new investment. So should Ottawa.
Well, a shareholder advocating for a sale of an asset that will increase their share value. Awesome to see you haven’t changed at all Leona!