Mary River Mine


The Mary River Mine is an open pit iron mine operated by the Baffinland Iron Mines Corporation in the Mary River area of Baffin Island, Nunavut, Canada.
It is said to be the world's sixth most northerly mine.
Paul Waldie, a business reporter for The Globe and Mail, called the project one of the most ambitious in any Arctic region, and said it was expected to "triple the territory's annual gross domestic product growth rate and provide nearly $5-billion in tax revenue and royalties to the territory over the life of the project."
The original plan was to build a railroad to transport ore to a new port on the south coast of Baffin Island. Environmental critics expressed concern over the impact the railway will have on migrating caribou, and the impact the frequent passages of the big ice-breaking freighters will have on sea mammals. Archaeologist Sylvie LeBlanc has described how the railway line will parallel the longest line of ancient inuksuit yet found over a line long. Several years were spent undergoing an environmental assessment for the railway plan. But 2012, shortly after the plan had been approved, Baffinland abandoned it in favour of a new plan of having ultra-large dump trucks convey the ore directly from the mine-site via a "tote road" over to a new port on Baffin Island's north coast. Baffinland has asserted that changes in the market for iron ore required a plan that was less expensive to get underway, even if it would be of limited capacity, and would be more expensive to run.
In November 2019, Baffinland announced that they would be laying off 586 contract employees employees working at the mine. The lay-offs include 96 Inuit and 490 non-Inuit. Salima Virani, of Baffinland said that they were laying off these employees “Due to the uncertainty of Phase 2 permit approvals, work associated with the 2019 Work Plan has been demobilized,”.

Timeline

The ore body

Iron ore was first discovered in the Mary River area by Murray Edmund Watts and Ron Sheardown, in 1962. But exploitation of the ore body waited for an increase in the price of ore. According to the Railway Gazette International the ore in this ore body is sufficiently pure that it will not be necessary to conduct any processing before shipping it to market.
The corporation expected in 2008 to sell the ore in Europe at no less than $67 per tonne for lump ore and $55 per tonne for fines. The corporation expected to produce per year for 20 years or more, and to pay down the cost of building the mine within the first 3 to 7 years.
In 2008 a sample was shipped to Europe for testing.
The ore was transported to Milne Inlet, where it was carried by barges to a freighter waiting off-shore.

Finance

Australian newspaper The Age reported that due to the financial crisis of 2007 Baffinland needed to secure an emergency loan of C$43.8 million, in order to ship enough supplies for the workers on site—or they would not have been able to survive the winter.
According to The Age the emergency line of credit was necessary because the Baffinland management did not have the funds available to ship supplies to the 200 workers on site before shipping closed for the season, "after investing in commercial paper that borrowers couldn't repay." According to The Age 95 percent of Baffinland's funds had been invested in short term debts investment vehicles, of 364 days or less.
The iron ore price has gone down from around US$150 in 2010-2013 to around $70 per tonne in early 2015, which should be a concern.

Take-over

In September 2010 a specially formed private equity firm Nunavut Iron Ore tried to buy all of Baffinland for C$274 million.
Richard McCloskey, then Baffinland's chairman, told Mining Weekly in August 2010 the firm was seeking partners to provide the financing for the mine's construction.
ArcelorMittal bid to buy Baffinland; Nunavut Iron Ore Acquisition Company subsequently made a hostile offer and increased it in December 2010. The two firms agreed to merge their bids on January 14, 2011.
Reuters reports that the share price tripled during the four-month bidding war.
In March 2011, it was announced that ArcelorMittal had taken a 70% share in the additional stake, and Iron Ore Holdings the remaining 30%. "Iron Ore Holdings is a limited partnership formed under the laws of Delaware for the purpose of making the Offer. Iron Ore Holdings is owned by Bruce Walter, the Chairman of Nunavut Iron, Jowdat Waheed, the President and Chief Executive Officer of Nunavut Iron, and funds managed by The Energy & Minerals Group which is providing the majority of the equity financing for the Offer. The Energy & Minerals Group is a private investment firm with a family of funds with over US$2 billion under management that invest in the energy and minerals sectors." Subsequently, Nunavut Iron became WW Mines.
ArcelorMittal retain the position of Project Operator in this 50-50 joint venture.

Insider trading reports

In January 2012 The Globe and Mail reported that some senior executives were suspected of profiting from "insider trading" of Baffinland stock.
According to the Mining Weekly Jowdat Waheed, an alumnus of Sherritt International and director at Sprint, and Bruce Walter tried to exploit information Waheed learned when he worked for Baffinland in early 2010 to try to mount a hostile takeover later in 2010.
In February 2012 CBC News reported that a hearing before the Ontario Securities Commission had been scheduled for January 2013. The initial phase of the hearing began January 14, 2013 and is scheduled to run through to February 22, 2013.
Both Jowdat Waheed and Bruce Walter were exonerated by the Ontario Securities Commission.

Royalty dispute

In 2016 the Qikiqtani Inuit Association announced it was planning to go to arbitration over a dispute over royalty payments from Baffinland. The dispute centers around Baffinland's obligation to pay advance royalties, until ore production reaches a threshold that marked the beginning of "intended commercial production".
The Mary River Inuit Impact and Benefit Agreement requires Baffinland to pay advance royalties. Baffinland was to pay a total of $20 million in advance royalty payments as its contract with Nunavut evolved, and then further quarterly advance payments, until the beginning of "intended commercial production". After the beginning of commercial production, Baffinland was to pay royalties of 1.19 of its net sales revenue. During its first three years of commercial production, Baffinland was to claw back the advance royalties.
Baffinland either did not make any of those quarterly advance royalty payments, or stopped making them in 2015. Its position is that "intended commercial production" began in 2015, because it shipped its first ore to market in August 2015. The position of the Qikiqtani Inuit Association is that the threshold for "intended commercial production", which should mark when Baffinland's production reached sixty percent of the production of 18 million tons a year Baffinland agreed to, in its 2012 project certificate agreement with Nunavut. The 2012 project certificate agreement was based on the project design where Baffinland would complete a railroad to carry 18 million tonnes of ore to a port on Baffin Island's southern coast, at Steensby Inlet. But Baffinland subsequently claimed that a drop in the price of ore caused it to require an amended project design. In the amended project design billions of infrastructure expenditures, in Nunavut, would be postponed, because Baffinland would delay building the railway line.
In Baffinland's amended project design, annual production would be only 4 million tonnes of ore, carried to port by truck.
Ore is currently shipped over a "tote road"—a dirt road wide enough for Baffinland's massive 200 ton dump trucks. Baffinland claims that, when its amended project design was approved it set a lower threshold to reach, before it could begin clawing back advance royalties.
The three member arbitration board consists of Thomas R. Berger, a retired judge and former Royal Commissioner of the Mackenzie Valley Pipeline Inquiry and highly respected by Indigenous Canadians, Jim McCartney and Murray Smith.

Design

Initially a route to Milne Inlet on Baffin Island's north shore was preferred.
However the plans Baffinland submitted to regulatory boards revolved around an ambitious plan to build a special cold-weather railway line from the mine-site to a newly built port in Steensby Inlet on the south shore of Baffin Island.
This was described as more environmentally sensitive than a road route, cheaper to operate over the decades the mine will be in use, and a port in Steensby Inlet would be ice-free for eleven months—months longer than Milne Inlet. Ore would be warehoused at the port during the month the port was locked in ice.
After this plan had already received environmental approval Baffinland announced that a decline in the price of ore required sidelining the railway plan. Instead the ore would be trucked over over a "tote road" to Milne Inlet on the north shore of Baffin Island. Under the current plan freighters will continue to use the port even when Milne Inlet is ice-bound.
The Mine itself was always intended to be a huge open pit mine.

Railway route to Steensby Inlet

The railway route had a higher initial capital cost than any plan to ship ore by truck, before it could ship any ore.
But it was touted as being able to carry more ore than a roadway, for less per ton. Over the decades its higher initial cost would have been reclaimed several times over.
The route to Steensby Inlet on the south shore was said to be chosen, in part, because it would have been ice-free for a longer portion of the year.
According to the Financial Post this will be the most northerly operational railroad in the world, the Baffinland mine being about a degree of latitude farther north than the Russian railhead in the Yamal Peninsula.
In April 2011 the Nunatsiaq News online edition reported the railway was anticipated to cost $1.9 billion CAD—just under half the entire $4 billion cost of constructing the mine.
CBC News reported that Sylvie LeBlanc an archaeologist from Carleton University described an "uninterrupted alignment of nearly 100 inuksuit" that is parallel to the proposed route for the rail line.
Some of the inuksuit date back 4500 years.
The chain runs from Steensby Inlet to 10 km Lake, a distance of.
LeBlanc described the uninterrupted chain of inuksuit as unprecedented in length and historical value.
In 2012, Baffinland seemed to abandon this strategy, in favour of having ultra-large dump trucks convey the ore directly from the mine-site via a "tote road" over to a new port at Milne Inlet on Baffin Island's north coast.

Railbed

In 2008 the Railway Gazette reported construction of the rail line was planned to begin in 2012.
Because Baffin Island's soil is permafrost, the route was chosen so it lies on rock, gravel, or large-grained sand as much as possible. Fine-grained sand and clay soils pose more of a heaving problem when the surface layer annually thaws and freezes. The route will include five multi-span bridges totalling in length. Two tunnels and will be required. The tunnels will have to be lined and insulated to make sure waste heat from the trains and summer air doesn't melt the permafrost surrounding the tunnel. The route detours around large areas of poorly drained glacial deposits and areas likely to contain deposits of fossil ice.
The rail line will require 24 bridges in total and 300 culvert crossings. Seven of the bridges will be longer than Much of the line will run on top of a embankment, which needs to be pierced by culverts so wild-life can cross under it.
It is planned to use older carbon steel alloys for the rails, instead of more modern, higher performance alloys, because these can become brittle at very low temperatures. The rails and bridges are designed for fifty years of active service.
Construction of the rail line will require the opening of four quarries.

Parallel roadway

Parallel to the rail line there will be a roadway, wide, capable of carrying trucks weighing up to.
During 2010 and 2011, when two separate firms were bidding to buy out the original Baffinland management team, an alternate shipping proposal was under consideration.
In this alternate proposal ore would be shipped, by truck. The advantage to this approach would smaller start-up costs, and a shorter period before ore was shipped to market. Disadvantages were higher operating costs, making the price of a ton of ore approximately double that under the rail proposal, and a smaller capacity of ore, per year, as opposed to the per year under the rail proposal.

Rolling stock

The Railway Gazette reported in July 2008 that Baffinland planned to purchase three train sets, each containing 64 hopper cars, which will each make two round trips per day. Nunatsiaq News online edition reported in April 2011 that the two diesel locomotives per train-set would be called upon to lead trains containing 100 to 130 hopper cars. The Railway Gazette reported that EMD SD70 and GE Dash-9 were candidates for the lines' locomotives. Initial plans included running a personnel train several times per week. Later plans included building a permanent airstrip at the mine site.
Baffinland will be using GE ET44AC locomotives on the railroad.

Tote road route to Milne Inlet

Jowdat Waheed's group suggested using a cheaper tote road route during its 2011 attempt at a hostile takeover of Baffinland.
The tote road approach seemed to have been abandoned when the two groups of investors fighting to assume control of Baffinland agreed to a partnership. However, in late 2014, after the Railway plan had spent several years undergoing its environmental impact assessment, that plan was shelved.
Baffinland claimed a drop in ore prices required a return to the tote road plan.
Between January 2013 and August 2015, the price of ore, per dry metric tonne, dropped from $152 to just over $50 USD.
Milne Inlet is not as open to large, deep draft cargo vessels as Steensby Inlet. Therefore, Baffinland wanted to increase the number of departures to 150 per year.
The new plan would require the mine operating 75 ultra large dump trucks, instead of the 22 required by Mine proposal. The increased number of trucks would require widening the road, "twinning" portions of it, from one lane to two, and twinning some bridges.
The port facilities would need to be enlarged, to house more staff, and to store more ore.
Baffinland had requested that the Minister of Aboriginal Affairs and Northern Development, Bernard Valcourt grant the company an exemption from the land use plan.
When the Nunavut Planning Commission turned down Baffinland's revised proposal, one of the options the Commission offered to Baffinland was to seek an exemption from the North Baffin Regional Land Use Plan from an "appropriate federal minister"—like Valcourt.
Valcourt's exemption allows Baffinland to bring its amended Phase 2 proposal directly to the Nunavut Impact Review Board.
Baffinland's request stirred fear and distrust from residents of nearby communities, who appealed to Valcourt to turn down the request.
Nevertheless, Valcourt authorized Baffinland to bypass the Nunavut Planning Commission's decision and allowed it to proceed to present its proposal to the Nunavut Impact and Review Board for getting a new environmental assessment, on July 13, 2015.
The ten month shipping proposal has not yet been approved. The first ship full of ore from Baffinland Early Revenue Phase, which ships only 90 days a year, left Milne Inlet less than a month later.
On August 31, 2015, the Nunavut Impact and Review Board informed Minister Valcourt, and a Baffinland Vice President, Erik Madsen, that they were recommending to Ottawa that the changes to their plans that Baffinland had made were significant enough that a full review, and public consultation were necessary.

Railway route to Milne Inlet

In February 2016 Baffinland requested permission for yet another large change in their plans as to how to get ore onboard their freighters.
When permission was given for Baffinland's original plan to build a railway from the mine site to a new port in Steensby Inlet they were given permission to ship 18 million tons of ore, per year. In their second plan, where ore was to be trucked, via a tote road, to Milne Inlet, they had initially only requested permission to ship 4.2 million tons per year. When they requested permission, in 2015, to truck 12 million tons to Milne Inlet Nunavut authorities informed Baffinland that a change of that scale would require an additional extensive environmental review. Six months later Baffinland announced that, while they wanted to increase the amount of ore shipped through Milne Inlet, they would transport that ore there by rail—not by truck.
Elyse Skura, of CBC North, pointed out that Baffinland still had permission to ship 18 million tons of ore to Steensby Inlet, if they built that southern rail route.
Thomas Rohmer of Nunatsiaq Online noted that Baffinland's enrolment of Inuit workers had been disappointing, and fell short of the stated agreements.

Shipping

Nine icebreaking freighters

According to the Canadian Broadcasting Corporation, Baffinland plans to employ nine icebreaking freighters, each displacing 190,000 tonnes.
Baffinland plans to contract the Fednav Group to manage its shipping. When in full operation Baffinland plans to fill one freighter every two days. The plan to have freighters operating year-round has stirred controversy, because of its potential impact on sea mammals living on the winter ice-pack.
According to Splash247 Nordic Bulk Carriers acquired a five-year contract, worth $135 million, to carry 30 loads of ore a year from Baffinland. Nordic Bulk Carriers will allocate four panamax and two handysize vessels to this contract.
On July 4, 2018, Baffinland contracted for the services of the large Estonian icebreaker MSV Botnica for the months July through October.

Aerodrome

The Mary River Aerodrome, having a medium length gravel runway, was constructed adjacent to the base area. Flights are chartered by the mining company and operated by Nolinor Aviation.

Operation

The mine was planned to commence operations in 2014, staffed by a crew of 500.
In fact operations began in September 2014.
The sun sets on November 18 and does not rise again until January 23.
On February 29, 2012, the Nunavut Impact Review Board announced final environmental hearings would be held in Iqaluit, Igloolik and Pond Inlet, in July 2012.
The bulk carrier Federal Tiber departed from Milne Inlet on August 8, 2015, with the first shipment of ore from the mine. She was bound for Nordenham, Germany, at the mouth of the Weser River, with 53,624 tonnes of ore.
Nordic Bulk Carrier's first vessel, the panamax Nordic Odin, travelled from Baffinland's Milne Port, to Gijon, Spain, four days later, from August 12 to August 23, 2015. She encountered sea ice. Her ice class is a relatively light 1A.
In March 2017 Baffinland chartered an Ilyushin IL-76 for twenty flights, between Jack Garland Airport, in North Bay, Ontario, and the mine-site. The mining vehicles were too large to be driven onto the plane, and had to be disassembled before shipment.
On November 8, 2018, Baffinland announced they had shipped a record volume of ore, in 2018, over 5 million tonnes. Freighters made 71 separate departures from Baffinland's Milne Inlet port. Two of the freighters transitted Russia's Northern Sea Route, on their way to destinations in Asia.

Environmental concerns

The CBC interviewed Inuit from the region in April 2008, about their concerns with the plans.
Jaypetee Palluq, an Igloolik resident who had been asked to serve on a Baffinland advisory committee, was concerned that the mine's operation would interfere with the traditional hunts for sea mammals, like walrus. He called on Baffinland to "find an alternate shipping route to the mine, regardless of the cost." Paul Quassa, Mayor of Igloolik, also expressed concern, over the effect of freighters on the ice used by the Walrus. He said the region was known for its highly prized aged, fermented walrus meat, a valuable export from the region.
In August 2008 the CBC reported that Baffinland acknowledged three fuel spills.
Baffinland's vice-president of sustainable development, Derek Chubb, asserted that the three spills were contained within "secondary engineered containment facilities", and that there was no environmental damage. of aviation fuel leaked from a fuel bladder at the mine's port facilities on Milne Inlet. The other two leaks of, occurred near the mine site. Baffinland acknowledged that the leaks had been found months earlier, but had not been made public. Michael Nadler, the regional director general of the Department of Indian and Northern Affairs speculated that mine officials may not have felt an obligation to publicly report the leaks because they believed there had been no damage.
On September 22, 2008, of contaminated water was released in what officials described as "human error".
In January 2012 Baffinland submitted a draft environmental plan to the Nunavut Impact Review Board.
On February 29, 2012, the Nunavut Impact Review Board announced that Baffinland's 10 volume environmental plan broadly met its requirements for the points this kind of plan should address.
In May, 2012, archeologist Sylvie LeBlanc described a chain of inuksuit that is parallel to the proposed route of the rail line as of unprecedented length and historical value. LeBlanc registered her concern with the Nunavut Impact Review Board that explosions necessary to build the rail line will trigger vibrations which will damage the inuksuit. An internal Baffinland environmental impact study had said that there should be a "buffer distance" between the site of any blasting and sites of archeologically significant structures—but the study didn't specify what the distance was.
On July 6, 2016, the World Wildlife Foundation, one of the organizations that sits on an oversight board, the mine's Marine Environment Working Group, criticized Baffinland for a lack of transparency.
On November 2, 2016, CBC News reported that residents of Igloolik were describing a hum or buzz, coming from deep within the Fury Strait and Hecla Strait—near Steensby Inlet where Baffinland has one of its ports. Paul Quassa, Igloolik's representative to the Nunavut Legislative Assembly, said the hum had been disturbing the sea mammals community members rely on for food. The hum is very loud, so loud the complement of vessels transiting the straits can hear it transmitted through the hulls, without any electronic aids.
Baffinland has been ranked as the 7th best of 92 oil, gas, and mining companies on indigenous rights in the Arctic.

Future expansion

The corporation has signed a joint venture agreement with Nunavut Tunngavik Incorporated.
Nunavut Tunngavik controls the resource exploitation of Inuit owned lands. The agreement allows Baffinland exploration and resource development rights to of Inuit-owned land adjacent to the mine-site.