Yellowknife’s leaders are being warned their city will take “a big hit” if they do not lobby for more territorial government support of mining and mineral exploration.
The territory’s chamber of mines urged city councillors on Monday to apply more political pressure to the NWT government – reiterating several miserable forecasts for the territory’s economic future.
The chamber asked Yellowknife to lobby the territory on two key fronts: bolstering support for mineral exploration, and connecting the North Slave to cheaper, greener power.
“The NWT mineral industry’s future is bleak,” said Tom Hoefer, the chamber’s executive director. “It’s going to put the NWT and Yellowknife economies under threat. They already are, to some extent.
“You can expect Yellowknife is going to feel a big hit [and] we think you need to do more,” he told councillors.
‘Not doing enough’
The chamber’s arguments, which it has put forward for years, centre on the territory’s falling mineral exploration and the cost of mining in the NWT.
Hoefer presented statistics which, he said, showed levels of mineral exploration in the NWT had tracked below global economic trends – unlike in Yukon, Nunavut, and the rest of Canada.
“We’ve chased away investors … Something is wrong here. We’ve created this problem ourselves. We have lost out on over $1.4 billion in exploration,” he claimed.
“We are still losing our exploration share; investors are going elsewhere. We haven’t done enough to turn this around.”
Gary Vivian, the chamber’s president, added: “Without exploration, you’ll never find new mines. The point is, Yellowknife has an opportunity here about going to the GNWT and pushing support for the minerals industry. They don’t get it.
“Investment in the territory has dropped significantly and, if you’re not searching, you’ll not find anything new. Without that investment, the mining industry will die.”
Even should exploration pick up, the chamber argues both the cost and carbon footprint of power generation in the territory will dissuade the mining giants that would likely bring any new mine to fruition.
The North Slave’s power grid is not connected to the rest of Canada, much of the territory is reliant of diesel for power generation, and costs can be seven to eight times those found in southern provinces.
Once again outlining points the chamber has made for years, another of its directors – mining consultant David Connelly – told councillors: “What has fundamentally changed for the large companies is, starting about 10 years ago, they started signing up for the carbon disclosure program. More and more, the buyers of these commodities want to be able to trace how much carbon is in the supply chain.
“The companies say this is a very significant impediment: the inability to see a pathway to much lower carbon in energy going into mining.
“What they are looking for from the GNWT – and this is where the chamber is asking for council to support these efforts – is to show there will be a pathway to bringing greener power from the south.”
The simplest path to greener power involves connecting the North Slave to the south via the Taltson hydro system, in the South Slave.
That project has been talked about for years but its prohibitive price tag – more than $1 billion, none of which is currently funded – means no serious development has taken place.
The territorial government has continually insisted it is trying to persuade Ottawa to come up with the necessary cash.
Last year, when the NWT released an emissions reduction plan designed to meet the federal government’s climate change goals, ministers made clear emissions targets would be missed without huge federal investment – in effect issuing an ultimatum over funding.
“Without the infrastructure to bring cleaner, greener power to the North in large and reliable quantities, it’s going to be very difficult to attract investment into the mining side again in future,” said Connelly on Monday, making a comparison with Minnesota.
“Minnesota has offered to run a hydro line [for mining companies] with power at five cents. Even if we had to build our own diesel, it would be 33, 35 cents. The cost is an issue,” he said.
The chamber repeatedly pointed to Yellowknife’s perceived vulnerability in urging councillors to act.
For example, according to the chamber, more than 1,000 of the city’s residents were directly employed by mines as of last year.
Paul Gruner, president of the Det’on Cho Corporation, told councillors his corporation, and hundreds of associated workers, were relying on solutions being found.
“We’re looking at ways to diversify [but] there’s no way, outside the resource sector, we can diversify enough to make up,” said Gruner.
While most of the action the chamber is requesting involves lobbying at territorial and federal level – and creating a public plan to support the industry – the group also suggested Yellowknife capitalize on emerging mines in Nunavut’s Kitikmeot region.
Referring to the region’s Back River and Hope Bay projects, Hoefer said Yellowknife was ideally placed to serve as an “employment and residency hub” for both, bringing in business.
The chamber had, at the start of proceedings, gone so far as to request that every councillor publicly indicate their support for the mining industry.
In the later question-and-answer session, Councillor Shauna Morgan expressed reservations about indicating “unqualified support” for the industry, saying her role as an elected representative was not to offer such guarantees to the private sector.
Responding to the presentation, Councillor Niels Konge turned the request for support around on the chamber’s representatives.
“Power is hurting our citizens and mining,” said Konge, asking whether the chamber could be considered “an ally of the city going forward, trying to get reasonable power rates for our citizens?”
Hoefer responded: “We are here to offer our ability to partner with you as well, absolutely.”
Items further down the agenda of the same meeting show the City of Yellowknife is already taking some steps to lobby the territorial government.
Documents show the City plans to ask the NWT Association of Communities to pass a motion lobbying the territory “to advance its efforts with respect to furthering a solution to effectively distribute clean energy from the Taltson Hydro project to Yellowknife and other key points in the Northwest Territories.”
Councillors are still debating whether to go ahead and recommend that motion, among others, to the association at its late-February annual meeting.