A company trying to start a Dehcho zinc mine says regulators are to blame for up to a year-long delay. One regulator says the delay is the company’s own fault.
NorZinc says construction of a winter road to Prairie Creek, where the company intends to mine zinc, lead, and silver, will be delayed “due to unexpected regulatory requirements.”
Prairie Creek is fully enclosed by the Nahanni National Park Reserve. Both Parks Canada and the Mackenzie Valley Land and Water Board have regulatory jurisdiction over different stretches of the proposed winter road, which would run past Nahanni Butte and through the park.
Building a winter road is a precursor to NorZinc’s planned construction of an all-season road to the mine.
In a December 20 news release, NorZinc said it had deferred construction of the winter road by up to a year because it did not yet have regulatory clearance.
The company said that “due to the time assigned for review and consultation by the authorities, it will be unable to secure the necessary management plan approvals … in time for the winter road construction season, which must begin in January 2022 to achieve its objectives.”
The statement continued: “As a result, the expected project timeline to commence concentrate production by the end of 2024 is delayed by approximately one year.”
Rohan Hazelton, NorZinc’s president and chief executive, was quoted as saying: “We are very disappointed that we have been unable to agree with the regulators on how to fulfill the permitting process in a timely, predictable, and transparent manner.
“This situation has resulted in a significant delay in delivering the project’s benefits to our stakeholders, especially our shareholders, as well as the people of the Northwest Territories, who have the most to gain from the project’s significant benefit by way of jobs creation and economic stimulus.”
The company had only just touted the “compelling” economics of Prairie Creek, pointing in particular to zinc’s addition to Canada’s critical minerals list – a list of minerals “considered critical for the sustainable economic success of Canada and our allies,” according to the federal government.
Requirements ‘haven’t changed’ for two years
One of the regulators involved says NorZinc has only itself to blame for the delay.
Shelagh Montgomery, executive director of the Mackenzie Valley Land and Water Board, said NorZinc had been granted the basic land use permit and water licence required for a winter road – known as authorizations – in November 2019, and could have filed the required management plans any time since then.
Several times, Montgomery said, regulators had told NorZinc its management plans would need to be filed 60 to 90 days before any work was intended to begin.
She pointed to letters issued to NorZinc in May and July 2021 as examples of that timeline being spelled out.
The May letter, using the acronym CZN to refer to NorZinc, states in part: “The board is aware that the authorizations for the all-season road project require multiple submissions both 60 and 90 days prior to the commencement of phase one activities, and that this may pose a significant burden to reviewers in the event CZN submits multiple plans in a short period of time.
“The board encourages CZN to consider this when planning submissions and advises CZN to make submissions as early as possible to avoid potential unforeseen delays.”
In November, the board warned NorZinc not to begin any construction until all plans were approved, adding 11 plans had not received full approval at the time.
Montgomery told Cabin Radio last week: “They’ve had those authorizations since November 2019. They haven’t changed, in terms of their requirements. It’s not like they were only issued by the board in September 2021. They’ve been around for two years.”
Montgomery said the last management plan was only submitted by NorZinc on December 3, meaning it must be sent out for review until at least January 6. To allow for the 90-day review period and ensure work could begin this winter, that plan should have arrived in October at the latest, Montgomery added.
Parks Canada, in a statement, said: “Parks Canada has been collaborating with the Mackenzie Valley Land and Water Board to ensure a coordinated process and has continued to respect the timelines outlined in NorZinc’s water licence and land use permit.
“The agency remains committed to working closely with NorZinc, Indigenous partners, and the Government of the Northwest Territories to ensure that the regulatory process is respected and that the ecological integrity of Nahanni National Park Reserve is maintained.”
NorZinc did not respond to a December 22 request for comment.
The territorial government’s Department of Industry, Tourism, and Investment, asked for its view of the dispute, said the issue was political in nature and referred Cabin Radio to industry minister Caroline Wawzonek.
The NWT government’s cabinet communications team, which coordinates interviews with ministers, did not respond to a December 22 request.
Fort Simpson’s Łı́ı́dlı̨ı̨ Kų́ę́ First Nation, which signed two impact benefit agreements with NorZinc in August, did not respond to a December 22 request for comment. Nobody at Nahanni Butte’s Nahæâ Dehé Dene Band could be reached.
Fort Liard’s Acho Dene Koe First Nation has asked for Prairie Creek to be sent to a new environmental assessment. The project, in an older form, came through a first assessment in 2011.
“The substance of the initial environmental assessment no longer adequately conveys the impacts of this project on the environment and Acho Dene Koe First Nation’s cultural, social, and economic well-being,” the First Nation argued in an August letter to regulators.
On December 17, the First Nation wrote again, objecting to the consultation process for the Prairie Creek road.
The December letter, sent to the Government of the Northwest Territories, stated the regulatory process had “failed to acknowledge Acho Dene Koe First Nation rights and interests are impacted by this project.”
The letter stated NorZinc “has been repeatedly instructed by the Mackenzie Valley Land and Water Board to engage meaningfully with Acho Dene Koe First Nation.”
The First Nation added it had provided “a proposal for a traditional knowledge and land use study, as well as a framework approach for contributing to cultural heritage protection monitoring and oversight,” to which, the letter stated, NorZinc had not responded.
NorZinc, in its December 20 news release, said: “Community input and support is essential in creating a successful regulatory review and NorZinc is dedicated to ensuring that its activities fulfill local community expectations regarding reasonable benefits while protecting the environment.”
The company, noting its signed agreements with the Nahæâ Dehé and Łı́ı́dlı̨ı̨ Kų́ę́ peoples, said: “The economic development opportunity of the project in terms of total expected gross revenue is over $6 billion, and the potential for direct federal, territorial, and local government benefits is over $600 million.”