NWT Mining After Devolution

Transcription

1 NWT Mining After Devolution NWT Chamber of Commerce Annual General Meeting Tom Hoefer: April 10, 2014

2 Key Messages Mining has been good for us After Devolution more mining will be needed Actions are needed to support mining and to make it even more beneficial We are on the right path 2

3 Mining has been good to us Over C$60 billion since 1932 Zinc 30% Gold 18% Diamonds 38% Uranium 1% Silver 2% Lead 8% Tungsten 3% Current & Past Producing Mines: Ekati Diavik Snap Lake Meadowbank Con Giant Lupin Polaris Nanisivik Pine Point Cantung Discovery Rankin Nickel Rayrock Outpost Island Supercrest Eldorado Ruth Terra Norex Silver Bay Colomac Tundra Camlaren Contact Lake Ptarmigan Tom Mon Cullaton Lake Salmita Hope Bay Negus Thompson Lundmark Rich El Bonanza Rycon Bullmoose 3

4 Our 4 mines create huge value Ekati (diamonds) Diavik (diamonds) CanTung (tungsten, copper) Snap Lake (diamonds) $2,500 $2, diamond production $1.56b Total diamond production $22b Plus tungsten & copper Northwest Territories Mineral Production NWT Nunavut Yukon $C Millions $1,500 $1,000 $500 $ (p)

5 Our mines pay significant taxes $C millions $700 $600 $500 $400 $300 $200 $100 $0 Diamond Mining Taxes Mining royalties NWT Corporate Taxes Federal Corporate Taxes Source: GNWT ITI Economic Model AND THAT S NOT ALL! Additional taxes include payroll, income taxes, fuel & property taxes Help pay for schools, hospitals, highways, social services, and more 5

6 Our royalties are shared with Aboriginal groups Diamond royalties shared with settled claim areas since 2001: Gwich in $11 million Sahtu $10.8 million Tli Cho $12.8 million Over $34 million Devolution promises additional royalty sharing 6

7 Mining has contributed to Infrastructure Highways, eg, to Yellowknife, Pine Point & Ft. Resolution Railway (to Hay River & Pine Point) All 3 NWT hydro electric facilities Microwave communications Ports (at Nanisivik and Polaris) 7

8 Mines are technologically innovative High efficiency diesel power Innovative wind energy Dikes Ice roads Heat recovery on diesel powerplants Diavik s wind turbines National award winning Diavik dikes 8 Engineered ice road highways

9 Our mines create significant benefits : diamond mines exceeded expectations 19,000 person years northern jobs 50% Aboriginal Over $9.3 billion northern business $4 billion Aboriginal Significant training investment $100 million plus to communities $ millions in scholarships Download at: 9

10 Our mines put us on the world stage 2012 Diamond Production Value ($US) The Northwest Territories is the world s 3 rd most valuable diamond producer South Africa Angola Others Botswana Russia Canada 10

11 Our largest private sector GDP contributor NWT Mining s direct economic contribution exceeds all other private sectors AND contributes indirectly to other sectors, eg, real estate, transportation and construction Public admin 11% Health & social 5% Education 4% Real estate 7% Transportation 5% NWT GDP 2012 Other 13% Trade 6% Mining 28% Construction 9% Oil & gas 12% 11

12 AFTER Devolution more mining needed Devolution means more independence and increased self reliance We are now more responsible for our future We can generate our own wealth & improvements We have the tools a new regulatory environment robust financials tremendous resource potential 12

13 After Devolution Yukon mining Yukon investment and production increased No accident resource development pays the bills $600 Yukon Exploration Investment & Mineral Production $C Millions $500 $400 $300 $200 Exploration Mining $100 $ Yukon completes devolution,

14 Do we still have mining opportunity? YES! Tremendous untapped mineral potential 8 geological provinces Diverse mineralogy Gold, silver, diamonds, lead, zinc, uranium, tungsten, rare earths, cobalt, bismuth, nickel, copper, etc. Under mapped & under explored equals opportunity 14

15 Mines don t last forever NWT Mine Lives (years) Ekati? Diavik Snap Lake Cantung? New mines take time to find We need to be looking for and developing new opportunities to sustain mining benefits 15

16 We have mining opportunities before us NICO (gold,cobalt, bismuth) Awaiting water license, in financing EKATI Jay & Cardinal (diamonds) In approvals process Prairie Creek (base metals, silver) In final design & financing Yellowknife Gold Project (gold) EA paused Pine Point (base metals) Completed approvals process, but in receivership Nechalacho (rare earths) Awaiting water license, in financing Gahcho Kué (diamonds) Awaiting water license, pioneering work has begun 16

17 What new opportunity looks like GahchoKué Pioneering work has begun 770 truckloads over ice road 150 workers on site First production on schedule for Q Robust economics Capital costs $859 m / Annual operating costs $218 m Average annual production 4.45 million $150/ct Mine life of 12 years; First production Q

18 Frankly, we need more projects Mining Project Name (Operator) NICO (Fortune Minerals) Nechalacho (Avalon Rare Metals) Prairie Creek (Canadian Zinc) Gahcho Kué (De Beers, Mtn. Province) Commodity Expected Jobs Gold, Copper, Cobalt, Bismuth 150 Rare Earth Metals 286 Silver, Zinc, Lead, Copper 220 Diamonds 380 TOTAL JOBS ~ 1,036 EKATI Mine (closes in 2020) Diamonds TOTAL JOBS ± 1,400 4 leading projects are not enough to displace the loss of EKATI Sustaining EKATI will be important 18

19 Support new mines, yes but help sustain what you already have too, ie, EKATI EKATI is an economic anchor of the economy 10% of the NWT s GDP Approximately 1,400 workers With a plan to extend mine life by years 19

20 Mining growth also requires healthy exploration $600 Exploration & Deposit Appraisal Expenditures $C Millions $500 $400 $300 $200 NWT Nunavut Yukon $100 $ NRCan March 2014 Investment uncertainty has chased away $ millions in investment, jobs & business. 20

21 NWT Exploration Share NWT as % of Total Canadian Mineral Exploration 25 % of Total Canadian Spending NRCan March 2014 Our share of total exploration has been in decline for some time. We need strong, renewed efforts to bring investment back 21

22 We also need to capture more benefits Total Diamond Mine Workforce Northern, 51% Southern, 49% Opportunity 22

23 How do we all this: grow mining AND capture more benefits? Reduce investment uncertainty Reduce costs to industry and to Northern residents Increase northern resident labour capacity Market a new and improved NWT 23

24 Reduce investment uncertainty New MVRMA brings good legislative changes, but doesn t address all the uncertainty Unwarranted EA referrals in unsettled regions Lack of EA proportionality Total timeframe for environmental reviews Absence of interim guidance on Aboriginal consultation obligations Cost recovery requirements in an already costly jurisdiction Resolve unsettled land claim issues Settle land claims particularly Akaitcho, a very mineral rich region, but other claims too Work with unsettled claim regions to address uncertainty 24

25 Reduce costs to industry & residents Reduce the cost of business for industry Build infrastructure, eg, cheaper power, roads Reduce labour costs Provide exploration enablers, eg, geoscience, financial Reduce the cost of living for Northerners Provide cheaper power Reduce the freight cost premiums Increase incentives Northern Residents Tax Deduction 25

26 Increase northern resident labour capacity Invest in Northerners Increase education success Invest in training Retain them in the NWT Attract southern workers Reduce the cost of living Tax & other incentives 26

27 Market like crazy! 27

28 We are on the right path 28

29 Conclusion Mining has been good for us After Devolution more mining will be needed Mining can be even better for us We need to take actions to make it so People are counting on us! 29