Baffinland begins mining Mary River iron

Baffinland Iron Mines Corp. commenced mining operations in September at its Mary River iron ore mine located on northern Baffin Island, Nunavut.

Mary River is one of the world's richest and largest iron ore deposits in development and contains roughly 365 million metric tons of high-grade ore. The current mine is extracting ore from the first of nine known high-grade iron deposits on the property.

The first load of ore was transported Sept. 8 to the company's port site, which is under construction at Milne Inlet. There it will be stockpiled to await loading onto oceangoing vessels during open-water season in 2015.

Due to the unusually high iron content (67 percent) of the ore at Mary River, which is located in the Qikiqtani Region of Nunavut, nearly 500 kilometers (310 miles) above the Arctic Circle, no processing is needed before it can be shipped to market. No tailings will be produced from the mine, which reduces the operation's potential impact on the environment as well as the cost of production, according to Baffinland.

However, the area where the mine is located experiences very cold temperatures that average minus 30 degrees Celsius (minus 22 degrees Fahrenheit) in winter and 24-hour darkness from November to January. Summers bring 24-hour daylight from May to August, but continued cool to cold conditions.

"After more than 50 years of talk about developing Mary River, Baffinland has succeeded," Baffinland President and CEO Tom Paddon said in a statement Sept. 22 announcing the mine's start-up.

Initially proposed as an enormous C$4 billion rail and port project, the Mary River operation was expected to ship upwards of 18 million metric tons of iron ore annually. In 2012, Baffinland, a 50/50 partnership between European steelmaker ArcelorMittal and Nunavut Iron Ore, decided to scale back the mine proposal in response to difficulties obtaining financing and lower iron ore prices, which eroded the economic feasibility of the original project.

Instead, Baffinland, with the approval of federal and Nunavut regulators, will initially pursue a more modest road haulage program that will ship just 3.5 million metric tons per year of iron ore to market from a year-round mining operation. Ore transported to Milne Inlet will await loading onto ships that will carry between 70,000 and 90,000 metric tons. Baffinland expects to use about 55 ships during the open-water season to transport the ore to market, in addition to other ships to sealift supplies and fuel to the mine.

The Canadian government gave Baffinland the green light for the early revenue phase amendment, or scaled-down version, of the Mary River project on April 29.

The Federal Minister of Aboriginal Affairs and Northern Development Canada, Bernard Valcourt, approved the positive recommendation by the Nunavut Impact Review Board. Minister Valcourt also signed off on the Nunavut Planning Commission's proposed recommendation to amend the North Baffin Regional Land Use Plan to accommodate the ore shipping component of the project.

With the introduction of the early revenue phase, the Mary River Project consists of mining iron ore from the reserve at Deposit No. 1 at a production rate of 21.5 million metric tons per year.

Initially, for the early revenue phase, 3.5 Mtpa of iron ore will be mined, transported by trucks to Milne Port and shipped to markets from Milne Port during the open-water season.

As global markets improve for iron ore, the company intends to proceed with the construction and operation of the larger approved project, which includes the construction, operation, closure, and reclamation of a large-scale mining operation (open-pit mine) and associated infrastructure for extraction, a railway link for the transportation of ore to Steensby Port, and, the construction and operation of year-round port facilities on Steensby Inlet for the shipment of iron ore.

Once Steensby Port and the railway are operational, Baffinland expects that is will continue to ship up to 3.5 Mtpa of ore via Milne Port for the duration of the mine's operation. The environmental and socio-economic impacts assessments for the early revenue phase have accounted for the shipment of 3.5 Mtpa of ore from Milne Port for the life of the mine (21 years).

Safety milestone

Paddon said the event marks an important moment in Canada's Far North, not only because of start-up of mining at Mary River but also because the company celebrated three years on Sept. 19 without a single lost-time injury.

"This is excellent news," said Baffinland President and CEO Tom Paddon. "I am extremely pleased to say that we are now truly a mining company; we have drilled, blasted, crushed and transported final iron ore product to the port at Milne, and we have done this with a record of no lost-time injuries over a three-year period; a significant achievement particularly when you consider that we are operating in the high Arctic. … While we still have important work to do that will ensure the efficient transport of product to market, we can rightfully take pride in what our Baffinland team has safely undertaken, thus far."

Ongoing dock construction

After completing design and engineering of a dock for the Mary River operation last spring, Baffinland contractors began construction of the dock at Milne Port, which is located north of the mine to which it is connected via an upgraded tote road.

In July, the company reported the shipment of specialty ArcelorMittal sheet piles, produced in Luxembourg, to the port site for use in constructing a sheet pile dock at Milne Inlet, which will serve as the port for the Mary River mine.

Straight web sheet piles AS 500 and HP bearing piles, as well as special piles fabricated by a specialized local subcontractor, were shipped from Antwerp, Belgium, to Nunavut, to form part of the Milne dock. The dock will support a two-tower radial ship loader and reclaim conveyor system that will load vessels with iron ore from the Mary River deposit.

Local impact

Among mitigation measures for relatively few effects of the project, a Baffinland spokesman said the company plans to use dust suppression techniques to monitor and control dust from the tote road that trucks will use to carry iron ore to Milne Port.

The company also will consider providing compensation to hunters affected by changes to wildlife, in partnership with the Qikiqtani Inuit Association, which signed an Inuit Impact and Benefit Agreement with the company last fall.

Royalties from Baffinland through provisions of the Inuit IBA enabled the Baffin-area Inuit organization to post a C$18.7 million surplus for its latest fiscal year.

Employment survey

A recent survey of area residents, however, found that the locals see significant barriers to obtaining jobs at the mine. In a presentation by its Major Projects Department to members at its annual meeting Oct. 8 in Iqaluit, the Qikiqtani Inuit Association reported that local unemployed workers say poor education, language skills and computer skills as well as the lack of personal bank accounts are barriers to getting jobs at Mary River.

For the survey, the association interviewed 753 Inuit residents of Pond Inlet, Clyde River, Igloolik, Arctic Bay and Hall Beach, and 42 percent of those interviewed ranked as unemployed but available for work.

The unemployed group cited education as the top barrier to employment in that less than one-third of its numbers have attained a minimum high-school education.

They identified the next most common employment barriers as insufficient computer skills (64 percent), lack of a bank account (40 percent) and poor English language skills (21 percent).

Despite these barriers, many of the survey respondents showed interest in working at the mine, with employment interest ranging from 70 percent to 88 percent of people surveyed among the five communities, according to the association.

Camp service jobs, such as janitorial or catering services, received the most interest (64 percent) followed by health and safety jobs (62 percent) and jobs operating heavy machinery (56 percent).

Though it is still in the early stages of hiring workers for the mine, Baffinland has said it is looking forward to expanding its Inuit work force, primarily drawing from the Baffin-area communities of Pond Inlet, Arctic Bay, Clyde River, Igloolik and Hall Beach.

"Our focus is to draw as many employees as possible from those communities," Baffinland vice president Greg Missal said. "We spend a lot of time in those communities. We have community liaison officers in all five of those communities."

The Inuit Impact and Benefits Agreement developed with Baffinland includes a minimum Inuit employment goal, but that goal hasn't been defined yet, according to officials. The agreed-upon minimum Inuit employment goal is calculated by dividing the number of hours worked by Inuit at the mine by the total number of hours worked at the mine.