Baffinland wins output hike after larger plan blocked

Canada has approved a 40% increase in output from ArcelorMittal-backed Baffinland Iron Mines in the country’s far north a year after denying it a larger plan to nearly triple production. 

Northern Affairs Minister Dan Vandal early last month granted the company’s application to boost shipments for two years from its Mary River mine to 6 million tonnes of iron ore from 4.2 million. The ministry in late 2022 rejected the company’s proposal to increase production to 12 million tonnes a year. The project has been getting short-term government approvals to ship at the 6-million-tonne rate since 2018. 

This year’s OK comes after the November 2022 denial to expand the project, one of the northernmost in Canada on Baffin Island in the Arctic Ocean. The company, jointly owned by Luxembourg-based global steelmaker ArcelorMittal and The Energy & Minerals Group of Houston that has US$14 billion in assets under management, eventually wants Mary River to produce 12 million tonnes of ore a year. 

“As we move forward with the transition to a southern railway operation, we remain committed to creating jobs and economic opportunities,” Peter Akman, a spokesman for Baffinland, said by email on Thursday. “We delayed the start of the shipping season until icebreaking was no longer required, our vessels travelled in convoys whenever feasible to reduce overall underwater sound and we continued to limit speeds to 9 knots.”

Record set

The federal approval also allows for 900,000 tonnes in additional shipping from Milne Inlet if “unexpected circumstances” mean ore has been stockpiled at the port from the previous year. For example, that was the case last year when heavy ice put an early end to shipping and some ore was left at the port.

Baffinland set a new shipping record this year for a single season, loading fewer ships with more iron ore than ever before, Akman said. The company transported nearly 6.1 million tonnes on 75 shipments, although short of the operation’s total approval of 6.9 million tonnes. The previous record was 5.86 million tonnes in 2019, he said. 

The Nunavut Impact Review Board had recommended acceptance in September of the newer plan the feds approved.

The previous expansion plan also included the building of a new 110-km railway to the port. Baffinland framed it as as a way to sustain the jobs the company created. The application contained no changes to mining and crushing at the mine site.

There are five deposits on the Mary River property. Baffinland began mining in 2015 with a plan to  create an 18-million-tonne-a-year operation from the first deposit. Mining began at an annual rate of 3.5 million tonnes, which it trucked to Milne Inlet. The mine is a conventional truck-and-shovel operation with portable crushers at the mine site.

Correction: An earlier version of this story stated the federal government granted approval this week when it was last month. The Northern Miner regrets the error.