East of Yellowknife, a new mine tries to be different

Nechalacho, the NWT’s first new metals mine in decades, is about to enter production. Its owners envisage a model of smaller-scale mining, Indigenous involvement, and environmental responsibility.

The mine, around 100 km east of Yellowknife, is the first Canadian producer of rare earth elements – minerals that, in small quantities, power key parts of vehicles (especially electric vehicles) and various green technologies.

Phase one of the mine is small by NWT mining standards, sustaining around 30 seasonal jobs. This summer, 600,000 tons of rock will be mined, of which around 100,000 tons is expected to be valuable.

The mine is by no means an economic saviour in the territory’s otherwise depressed mining climate, but owner Cheetah Resources hopes to demonstrate it can run a small mine with minimal footprint that produces a high standard of rare earth concentrate.

On Monday, senior figures at Nechalacho gave a tour of the site to reporters. They say the mine stands out for its modest approach and lack of tailings in a territory beset by heavily contaminated sites.

The open pit being created this year is “probably smaller than any of the gravel pits in Yellowknife,” said Chris Pedersen, a geologist who has been working at Nechalacho since the 1980s. (Mine operator Cheetah is a newcomer by comparison: it bought the rights to near-surface minerals at Nechalacho from owner Avalon in 2019.)

Even with a planned expansion in 2024, Cheetah vice-president David Connelly said, Nechalacho will be “a small fraction of the size of a diamond mine,” unlikely to employ more than 100 people at a time.

Cheetah has hired Det’on Cho Nahanni Construction to run this year’s mining, which Connelly said was “the first time in Canada an Indigenous group is responsible for extracting minerals on its own territory.”

More than two-thirds of people at the site are Indigenous.

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.”

Kyle Bayha, a heavy equipment operator who grew up on Great Bear Lake, told reporters on Monday: “Everywhere else I’ve worked, I’ve been one of the minority – one of the few. Here it’s about 80 percent.

“That means lots. A lot of people back home don’t have training. They don’t work, right?”

New technology, no tailings

A new form of ore sorting machine being used at Nechalacho means, unusually for the NWT, no chemicals are being used at the mine. The ore – a mix of white quartz and red bastnaesite, the latter containing around 15 rare earth elements – is sorted using sensors and compressed air.

“You crush it up, you take the red rock from the white rock, and Bob’s your uncle,” said Pedersen. “It’s a dream.”

The lack of chemicals means no tailings pond.

“We think that is revolutionary, in the world, for respecting the land and water,” said Connelly, adding the new technology reduces water and diesel use.

Even so, Nechalacho remains a mine and cannot avoid a significant impact on the surrounding environment. There will still be a waste rock pile, even if it comes with no associated chemical tailings. Though the mine won’t ever reach the size of a diamond mine like the NWT’s Diavik or Ekati, its second phase still contemplates a much larger open pit than the first.

Bayha, who has worked on remediation projects like Tundra and Giant – cleaning up after mines that left toxic legacies – feels more confident about this one.

“I’ve usually worked on cleanups and I’ve noticed all the impacts on Fort McMurray,” he said, referring to the effect of the oilsands industry on northern Alberta.

“With this, I’m pretty happy that it’ll be environmentally friendly. There won’t be any tailings ponds. That’s pretty nice.”

‘Trying to define’ next phase

To an extent, Nechalacho is able to operate without chemicals because the rare earth deposits are sufficiently easy to access and mine that other techniques can be used.

But Connelly said Cheetah also saves money by mining this way.

When the original permitting applications for Nechalacho were filed, they described a much more traditional, and expensive, mine. New technology – in part derived from the metals recycling industry, Connelly said – means some of the mine’s components, like the ore sorting machine, now cost eight to 10 times less than they would have under the initial plan.

Whether that approach is easily replicated at other NWT projects remains to be seen. Regulators say Nechalacho has some unique factors that lend themselves to higher-tech, lower-footprint mining.

The mine already has a buyer for this summer’s output. Ore concentrate from Nechalacho will head by barge to Hay River then south to Saskatchewan for processing, at which point it will be sent to a Norwegian firm for further separation of individual rare earth elements and onward sale.

Connelly said the same firm, Reetec AS, has already “indicated it would like five times this year’s amount, starting five years from now.”

With that in mind, the project’s second phase – the larger open pit – is planned to be at least five times as large as this summer’s first phase. Cheetah hopes to reach that second phase by 2024.

“It goes to show you just how long it takes from exploration and discovery to development,” said Pedersen, the geologist, passionately demonstrating the rocks he has spent four decades endeavouring to mine.

“We’re still trying to define the second phase,” he added.

“It’ll be in the millions of tons, rather than 100,000 tons. We know it’s there.”

Connelly said the ultimate aim is a “multi-generational” small to medium-sized mine rather than a larger, shorter operation.

“We are demonstrating we can build a project while respecting land and water, creating employment, and producing rare earths that can meet stringent product specifications,” he said.