Mining for rare earth minerals is set to begin at the Nechalacho site, 100 km east of Yellowknife, in March.
Cheetah Resources, which is opening the mine, has signed a contract worth up to $8.7 million with Det’on Cho Nahanni Construction, which will carry out the work.
Det’on Cho Nahanni Construction is ultimately owned by the Yellowknives Dene First Nation. Workers will head to Nechalacho by the end of March and create a small open-pit mining operation set to last until September.
Cheetah expects to spend the next two years sorting through the resulting ore. The company plans to eventually expand Nechalacho into a larger mine.
In December, the company said it had agreed to sell processed material from the mine to Norwegian company Reetec AS.
Minerals found at the mine are used in products like the magnets in motors that power electric vehicles. China, the world’s dominant rare earths producer, recently increased output quotas to record levels to meet rising demand.
Geoff Atkins, Cheetah’s managing director, said signing a contract to use local labour demonstrated the mine’s use of “the most sustainable methods possible … so that we can further support the communities surrounding our project.”
Chief Ernest Betsina of Ndilǫ has said Nechalacho marks a transition from the Yellowknives Dene First Nation being “passive witnesses to major projects to being key participants.”
This year’s opening six-month stretch of mining and crushing will focus on a small area known as the North T zone, which is considered a demonstration project.
Drilling has commenced to scope out a second area that the company hopes will become a “larger-scale, long-life rare earths project.”
The first stage of the mine is expected to create 25 to 30 seasonal jobs. Cheetah recently opened an office in downtown Yellowknife.