Mine Development an Imperative for the NWT

Now is the Time for Public Infrastructure Projects to Move Forward

Global commodity markets are taking a toll. De Beers Canada’s Snap Lake Mine is the latest project to fall prey to declining prices. Diamond price experts at Roughprices.com reports that average world diamond prices have declined 18% year-over-year.

“This is clearly a blow to our economy,” said Kevin Diebold, President of the NWT Chamber of Commerce.

“The diamond mines’ direct and indirect benefits contribute close to 40% of the NWT’s GDP, the largest private sector contributor to the economy. It’s an industry worth protecting and one we have to grow.”

Diebold was clear to point out that “soft” global demand is something affecting all commodities and is “outside our circle of influence”.

“But there are factors that are within our influence that can help us achieve our resource potential. One of those is getting on with regulatory reform and making the regulatory regime more predictable. Another is getting on with critical infrastructure projects that will support exploration and resource development,” he added.

While De Beers is forging ahead with its Gahcho Kué Project, which will add 12 years of production and a workforce of 400, the project took several years to receive regulatory approvals and licensing.

“Dominion Diamond Corporation’s Jay Project is in the permitting process and the company is looking forward to a decision soon. The NWT needs this project to proceed,” said Diebold.

Dominion plans to start construction in the summer of 2016 in order to begin production in late 2019.

Jay Pipe’s initial capital development cost is estimated at US$657 million, injecting millions into the economy through jobs, goods and services. At peak construction the project will employ 400 workers directly.

“In these uncertain times the regulatory regime must become sensitive to the needs of the economy, people who need jobs, and the values that projects will bring in taxes and royalties. This can be achieved without exposing the environment to undue risk.”

The NWT is a resource-based economy. The diamond industry has been nothing short of transformational, particularly in terms of northern Aboriginal participation.

The industry has spent more than $15 billion (2013) to construct and operate three mines. Of this, over $10.6 billion (73%) was spent with northern companies and joint ventures, including $4.8 billion (33%) with Aboriginal companies. And the industry employed 3,100 people prior to the Snap Lake announcement.

But the regulatory regime and infrastructure deficit are impediments to new investments. As a result, the NWT doesn’t have any new major projects in the pipeline. This has serious consequences in the absence of any other significant economic activity to fill the gap.

“Perhaps it’s time to expand the role of the Board to balance economic and environmental priorities,” he added.

“We need a sense of urgency with regard to permitting. We need to start thinking outside the box and put people to work. We can continue the work on diversifying economy while continuing to support the growth of the resource industry. The two activities are not incompatible.”

Diebold pointed out that now is the time to get public infrastructure projects off the drawing board.

“Public infrastructure investments put people to work and at time when mining investments are “soft” it’s important for us to do our part to ensure jobs and prosperity,” he stated.

“With the increase in our debt cap we have the capacity to put more shovels in the ground,” added Diebold.

Studies show that every $1 of infrastructure spending adds $1.70 to final GDP. The new Liberal government in Ottawa has committed to doubling infrastructure investments over the next decade and doubling current federal infrastructure investments in each of the next two fiscal years.

Projects like the Inuvik – Tuktoyaktuk Highway and the Mackenzie Valley Fibre Optic Line need to be pushed to the finish line. The Mackenzie Valley Highway, Whati all-weather road and the Ingraham Trail extension all need to get off the drawing board.

In association with the network of community chambers, the NWT Chamber of Commerce is the largest business organization North of 60. NWTCC ensures that northern business and economic interests are brought to the attention of both the Territorial and the Federal governments.


For more information contact:

Mike Bradshaw
Executive Director
867-920-9505

Community Chambers

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