Mining in the Arctic: The Beginnings of an Industry

- August 22nd, 2019

The Arctic remains a relatively untouched slice of planet Earth, but northern jurisdictions are eager for miners to explore.

The Arctic is a harsh and unforgiving environment; whether it’s the weather conditions, darkness or isolation, it’s a region that hasn’t seen much human activity relative to the rest of the world.

Seven nations have territory north of the Arctic Circle: Canada, the US, Russia, Finland, Sweden, Norway and, through its enduring ownership of Greenland, Denmark. Iceland is also regarded as an arctic nation despite not having any territory within the circle, and China has declared itself a “near Arctic state” — whatever that means.

The Arctic provides many opportunities by way of its historical resistance to human interference: It’s relatively untouched, and its changing climate means there are new opportunities to pursue in transportation, exploration and discovery — especially in the mineral resources space.


Dig In To Find Out The Latest Outlook On Rare Earth

All The Information You Need To Make Wise Investments. Don't miss out!

The Investing News Network (INN) reached out to representatives from three jurisdictions in North America for their thoughts on the mining industry in the Arctic north, and what sets the region — especially the harshest parts of the region — apart from the rest of the world.

Mining in the Arctic: Opportunities in the north

When asked what sets the Arctic apart from the rest of the world when it comes to the mineral resources industry, the common theme among the experts was exploration, or rather lack of exploration.

“The environment is a little more challenging to work in,” said Paul Budkewitsch, who is a manager of mineral resources with the Government of Nunavut.

He said that the cold winters and a shorter summer season mean that exploration is limited.

“But that’s exactly the reason why it’s an area that’s been underexplored compared to many other parts of the world, so there’s a great potential that’s yet to be fully discovered or fully outlined in Nunavut.

“With that in mind, these are relatively young districts as well, so I think the future for potential growth or continuity is quite high as well. We’re not looking at the end of a mining industry in Nunavut; rather we’re looking at the beginnings of a mining industry.”

Representatives of the Mineral License and Safety Authority of Greenland said the same, noting that the lack of exploration means there is more opportunity for new discovery.

“Greenland is generally not well explored, which brings great opportunities for companies looking for new areas to discover,” they said.

The same can be said for the Northwest Territories of Canada.

“(The Northwest Territories is) a big region — the third largest region in Canada, and with that comes a number of geological provinces and commodities,” said Pamela Stand, who oversees minerals and petroleum resources as assistant deputy minister with the Government of the Northwest Territories.


Uranium Soared Last Year While Other Resources Tumbled

What's In Store For Uranium This Year? Find Out In Our Exclusive FREE 2021 Uranium Outlook Report featuring trends, forecasts, expert interviews and more!

Mining in the Arctic: Existing development

So what is in the north? Quite a bit when it comes to deposits, but very little in terms of active mines. Greenland is home to two operating mines (anorthosite and ruby), with another two (zinc and rare earths) in development. Nunavut has three gold mines and an iron mine, while the Northwest Territories has three diamond mines and a tungsten mine on care and maintenance.

The representatives from Greenland, Nunavut and the Northwest Territories all talked up the pro-mining bent of their jurisdictions. So what about these three jurisdictions? Why are they of note today?

As shown by US President Donald Trump and his unrequited interest in buying Greenland, the Arctic has been drawing more political attention as the world turns to underexplored regions with unrealized potential. While Trump’s team may have spun the president’s interest in the country primarily as a strategic and geopolitical one, it also mentioned resources.

Around the Arctic, nations with interests under the ice are putting more money into developing regions that have so far withstood much human interference, like in Norway, where the government gave the go ahead to the Nussir copper mine, well within the Arctic Circle.

Bogeyman of the west, Russia, has the attention of other Arctic nations, with an expanded icebreaker fleet, new military bases, undersea exploration programs and high hopes for the northeast passage connecting Murmansk to Vladivostok through the Arctic Ocean. Its major nickel-producing region around the city of Norilsk is also within the Arctic Circle.

Yet for the most part, the arctic section of North America remains undeveloped and underpopulated, with little infrastructure and low populations.

“I think that our isolation is an advantage, because we’ve got more unexplored potential up here than some of the southern jurisdictions in Canada where people have easier access,” said Strand.

Strand also talked about the low population of the Northwest Territories, which is home to less than 45,000 people — around half of whom live in the capital, Yellowknife.


Profit from resource markets this year

Read our new report to get started!

Despite the relative workforce shortage, Strand said that the three active diamond mines in the territory have high levels of local employment as mandated by the government. “(However,) there’s always a need to train more residents to work at the mines.”

He continued, “Our first priority is to train Northwest Territories residents to work in the sector, but, yes, we do have a fly-in fly-out (FIFO) workforce. With that being said, we do work with our producers to maximize northern and northern indigenous employment. It’s a very key project for us with any project that moves forward.”

For Nunavut, with similar issues around a low population (under 37,000) and isolation, Budkewitsch said that FIFO workers are too expensive.

“A lot of the industry makes very strong efforts to hire locally as much as possible,” he said. “They’ve all stated quite clearly that it’s very expensive to bring workers from the south up, and the more local people they can hire the better, so there’s a large effort that’s going on both by industry and by government to train people to these new kinds of jobs.”

Mining in the Arctic: Challenges in geography and infrastructure

For Greenland and Nunavut, geography works to limit the disadvantages of isolation, as both jurisdictions have ample access to the sea.

“Most of the ice-free areas are easily accessible by deep-water fjords, which makes shipping easy,” said the Mineral License and Safety Authority.

Budkewitsch said that, with most of Canada’s coastline in Nunavut, shipping is the way to go.

“Most of our communities are situated — with relatively few exceptions — near the coast or on the coast, so shipping is how we do get the bulk of our goods in and out.” 

Generally, a lack of infrastructure is a challenge, though. Ships can only access the area when the ocean isn’t completely frozen over, as icebreakers operate in the spring when the ice is already breaking up.

The Greenland authorities said seasonal variations can limit some parts of Greenland to one to two months of clear access.


Are You Investing In Gold Yet?

What Happened To Gold In Q1? Which Gold Stocks To Watch In 2021?
Exclusive Information You Need To Make An Informed Decision.

“Seasonal limitations highly depend on where in Greenland companies are operating. Some areas have mild winters whereas other areas have harsh winters with lots of snow and very low temperatures. The amount of ice at sea can limit shipping opportunities where the north of Greenland can only be accessed from the seaside one to two months a year whereas the southern part can be accessed year round.”

Inland Greenland is a kilometers-thick ice sheet, so ocean-bound travel is all that’s required. However, in the Northwest Territories, as in Nunavut — infrastructure is needed.

“There really isn’t much infrastructure in the north, so that puts a little bit of effort on the side of the companies that are doing the development to invest in those parts as well,” said Budkewitsch.

“We can’t really plug in to an electrical system or a road system like you can down south, so in the more developed areas of Canada it’s easier to do that. In Nunavut it takes a lot of effort and a lot of planning to build in those support structures to be able to conduct business and develop a mine.”

The investment is worth the trouble, though, he added, and Strand said the same for the Northwest Territories.

“We definitely have challenges — we do need infrastructure, we need energy … (but) it hasn’t stopped mines from producing, and our three diamond mines are world-class examples of how you can mitigate impacts to the environment with mitigative measures that all get approved in an independent regulatory environment.”

Mining in the Arctic: Climate change

Speaking of the environment, INN asked how climate change plays into the development of the north, with Budkewitsch noting that it is a challenge in development everywhere.

“One of the things that it’s requiring, or bringing to the front of everyone’s mind in terms of planning and long-term site monitoring, is the future uncertainties are much larger … (and the) range of weather patterns are much wider than previously anticipated, so bigger contingencies need to be built into these things, and that’s probably a good thing to do anyway.”

A clear advantage for a region like Nunavut is longer ice-free seasons, but Budkewitsch said that many problems around climate change are longer term, and in the short term attention is focused on infrastructure and the challenges of building on permafrost that is melting.

Strand said that climate change could have a similar effect on shipping for the Northwest Territories.

Also in the Northwest Territories, climate change throws up major problems with existing infrastructure in winter roads — or ice roads.


Silver Price Forecast - What Happened And Where Do We Go From Here?

Our Jam-Packed FREE Silver Report Highlights Key Insights, Exclusive Interviews And Promising Stock Picks!

“There’s a lot of pressure on the winter road system because of the warming climate and shortening season,” said Wally Schumann, who is the Northwest Territories’ minister of infrastructure.

“The ice isn’t as thick; they need to spend more money to thicken up the road to bring it up to safety standards. These are all challenging things around climate change for (miners) and ourselves too, because we have a number of winter roads ourselves that service a number of communities.”

Many of the challenges facing the Northwest Territories are the same as those in the rest of Arctic Canada.

“The challenges for us around the natural environment changing (are that) a lot of our infrastructure was built based on the permafrost under the ground, so we have shifting of buildings, our roads are being shifted dramatically, and we’ve got to spend a lot of money on bringing them back up to safety standards just because of this melting permafrost.”

Schumann stressed that for that part of the world, warming seasons aren’t something on the horizon, but something the territory is facing now, bringing along with it the infrastructure challenges mentioned above as well as coastal flooding concerns.

To address the issue, the Northwest Territories have the 2030 climate change strategic framework detailing the government’s approach.

For Greenland, the Mineral License and Safety Authority said that, while climate change isn’t within the department’s mandate, the autonomous territory could well benefit from higher temperatures.

“Climate change will impact the fishing industry that is Greenland’s main industry. Higher sea temperatures can bring new species and a greater amount of fish as the fish are moving further north. The farming industry in South Greenland could also benefit from higher temperatures.”

Mining in the Arctic: The future of the north

Each of the Arctic jurisdictions aren’t going anywhere as more attention is turned to the mineral resources available. Rather, climate change will draw interest from all sections of business, development and society overall — as evidenced by the Trump-Greenland sales pitch.

Don’t forget to follow us @INN_Resource for real-time news updates.

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.


What's On The Horizon For Precious Metals In 2021?

Trends, Forecasts, Expert Interviews and more! All The Answers You Need To Make An Informed Decision.

Get the latest Resource Investing stock information

Get the latest information about companies associated with Resource Investing Delivered directly to your inbox.

Resource Investing

Select None
Select All

Leave a Reply