Baffinland Iron Mines and Inuit association strike landmark agreement

A new multimillion-dollar agreement between Baffinland Iron Mines and the Qikiqtani Inuit Association (QIA) that includes a substantial royalty increase, Inuit oversight of environmental monitoring and direct community benefits may have set a new standard for Indigenous involvement in mining projects.

The parties’ Inuit Certainty Agreement (ICA) will see the QIA’s royalties from Baffinland’s Mary River iron ore mine on Baffin Island in Nunavut increase from 1.19% currently to 1.5% once the mine’s expansion is operational, and eventually to 3% over a five-year period.

Local Inuit communities will have substantial say in the mine’s operations under the agreement, with new oversight responsibilities of Mary River’s environmental impacts on land use and harvesting, as well as potential changes to community life — such as food sources and security. The monitoring program will contain specific thresholds with actions for Baffinland to take if they’re exceeded. The Inuit oversight committee will also ensure Inuit Qaujimajatuqangit, or traditional knowledge, is respected and incorporated into the project.

The agreement will see Baffinland make a one-time $1.3-million payment to the Mittimatalik Hunters and Trappers Organization in Pond Inlet to compensate for changes to their hunting experience over the mine’s life. It also gives the QIA the ability to identify water bodies affected by Mary River and determine compensation amounts for the communities under an existing water compensation agreement.

“To our knowledge, there’s very minimal, if even any, agreements where an Indigenous organization has that capability, in terms of influence,” said QIA president P.J. Akeeagok in an interview with The Northern Miner. “It’s right to the core of the operations of the company. Obviously [Baffinland does] have the license to operate, that’s why they’re there, but that ability for Inuit knowledge to be incorporated into the operations of the mine is significant.”

Akeeagok said the 34 schedules in the agreement are “echoes” of what the QIA heard over several years of community consultations, with environmental monitoring being the most important piece. “Inuit for many years have been seeking to really own that space in terms of research and playing a key role in monitoring,” he said. “When we started discussions with Baffinland in terms of the ICA, the focal point was how can we put Inuit in the driver’s seat of the project.”

The agreement provides a “huge shift” in Inuit employment targets, Akeeagok noted, and Baffinland will compensate local communities if it fails to meet those requirements. Inuit employment targets were previously reviewed on a yearly basis, but will now be based on three-year goals, such as hours of Inuit work, wages paid to Inuit or number of Inuit who participated in Baffinland training programs. Baffinland also agreed to make a one-time $400,000 payment to the QIA for “past Inuit requirement content issues” which will be distributed to communities.

An aerial view of Baffinland Iron Mines’  Mary River project. Credit: Baffinland Iron Mines.

The company – jointly owned by Nunavut Iron Ore and steel giant ArcelorMittal – has also committed to providing a childcare subsidy to Inuit employees of $19 per day for each child under the age of 14. It will also provide up to $15 million to build five daycare centres in communities near the mine.

“We were focused not only on community development but the levers and mechanisms we can use to help improve our employment levels at Baffinland,” Brian Penney, Baffinland’s president and CEO, told The Northern Miner. “Our goal is to get as many Inuit as possible working at Mary River. In doing so, you need the proper infrastructure for training and skills development, but also household support. That fits with our vision of where we wanted to go. It was brought up by the QIA but we 100% supported it.”

Baffinland is currently seeking an amendment to its project certificate for Mary River’s second phase, which would see iron ore production double, increased shipping and the development of a 110-kilometre rail line from the mine to the company’s Milne Inlet port in the northern part of the island. The operation currently uses trucks to get its iron ore to port. Mary River began mining and transporting ore in October 2014.

Many of the benefits in the agreement are contingent on the approval of phase two. “We are a bulk commodity, and there’s very few bulk commodity [operations] in the world with a trucking operation greater than 100 kilometres,” Penney said. “We need to complete the environmental assessment process and start that transition [to a railway] as soon as possible because only after that do we generate the revenues and the income necessary to generate those benefits.”

In November 2019, the Nunavut Impact Review Board’s (NIRB) public hearings on the expansion were halted after multiple interveners highlighted concerns with the rail line’s potential impacts on caribou and a lack of community consultation. Hearings were expected to resume in the spring, but were delayed further due to the pandemic.

The pause allowed Baffinland to work “really seriously” with the QIA since mid-February to address community concerns, and the agreement emerged from those talks, Penney said.

Community members previously expressed concern that Baffinland’s chosen railway path wouldn’t be passable for caribou. The agreement committed Baffinland to adopt a new route Inuit were more comfortable with, and bear the costs of any technical challenges associated with making the change.

“We are going to build that specific route and not going back to the original route listed in the permit application for the public hearing,” Penney said. “We believe [it addresses concerns from the public hearing] and we’re continuing to work with communities on that. As well, we’re committing to monitoring programs and adaptive management plan as well that, should there be an impact on caribou, there’s potentially other options we could put in place to address [that].”

Penney said he believes the ICA largely removes the risks associated with permitting the expansion, but the company will still need to wait for approval from the NIRB.