Nunatsiaq Online
NEWS: Around the Arctic February 24, 2017 - 12:05 pm

Agnico Eagle says federal carbon tax would hurt Nunavut mine operators

“Northerners should have the same right to a prosperous economic future as the rest of Canada”

STEVE DUCHARME
Operations like Agnico Eagle's Meadowbank gold mine, which uses a 40 megawatt diesel power plant, consume a lot of energy. The company says the federal carbon tax could add $20 million in extra annual costs to their operations and deter mining companies from investing in the North. (FILE PHOTO)
Operations like Agnico Eagle's Meadowbank gold mine, which uses a 40 megawatt diesel power plant, consume a lot of energy. The company says the federal carbon tax could add $20 million in extra annual costs to their operations and deter mining companies from investing in the North. (FILE PHOTO)

The federal government’s upcoming carbon tax rollout is “another blow” to northern development, and could deter the development of northern mines, Agnico Eagles Mines Ltd. said in a letter to Nunavut Premier Peter Taptuna last month.

The company could lose approximately $20 million a year by 2023 for its carbon emissions in Nunavut, Agnico Eagle said in the letter, which Baker Lake MLA Simeon Mikkungwak tabled Feb. 22 at the legislative assembly.

“Applying a carbon tax to the North would not be coherent with the government’s objective to develop the North so that its citizens have the same hopes for the future as the average Canadian,” says the letter, signed by AEM’s vice-president of environment and sustainable development, Louise Grondin, and its vice-president of Nunavut operations, Dominique Girard, dated Jan. 26.

AEM currently has three mines at various stages of development in Nunavut—all in the Kivalliq—including the Meadowbank gold mine near Baker Lake and the recently announced Meliadine and Amaruq gold mines, both of which will start producing in 2019 after Meadowbank winds down.

Right now, the company’s Meadowbank mine and mill complex, which will process ore from Amaruq in the future, is powered by a 40 megawatt diesel power plant.

According to the company, about 1,200 people are either directly or indirectly employed by AEM at Meadowbank and Meliadine, including 400 Inuit.

Late last year, Prime Minister Justin Trudeau confirmed that a Canada-wide carbon tax would start to phase in by 2018.

The tax initially places a $10 per tonne levy on carbon-based fuel, but that will slowly climb to $50 per tonne by 2022.

Canada’s three territorial premiers complained about the impact of a blanket carbon policy in the North, releasing in a joint statement in March 2016, advocating that Ottawa take into account the unique circumstances of their jurisdictions.

The cost of developing gold and base metal mines in northern regions is 2 to 2.5 times higher than in the South, according to a 2015 study by the Mining Association of Canada.

“The wall-to-wall application of the carbon tax to Nunavut would reduce even further the attractiveness of Nunavut for mining investors,” the AEM letter said.

AEM added it is sympathetic to global concerns about carbon-dioxide emission levels and is willing to participate in further discussions on carbon reductions in the North.

“Northerners should have the same right to a prosperous economic future as the rest of Canada,” the company said.

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