March/April 2008

Northern exposure

Raglan project’s ongoing expansion

By D. Zlotnikov

Trucks at sunrise, Raglan mine

Since beginning its existence in 1995, the Raglan mine has proven to be both a challenge and a boon to Xstrata. Situated on the Katinniq plateau in the Far North of Quebec, the mine is only accessible by air or sea. The mine’s location in the very sparsely populated Nunavik region also means that the workers have to be housed on-site and flown out for their time off, either to their homes in the nearby Inuit communities or to the city of Rouyn-Noranda, about 1,500 kilometres to the south.

The extracted ore goes on an extended journey of its own, first being milled on-site, then trucked to the Xstrata-owned wharf on the shores of Deception Bay,where it is loaded onto an icebreaker and shipped to Quebec City. The concentrate is then moved by rail to the smelter in Sudbury. The resulting nickel matte is returned to Quebec once more from where it is shipped off to the final destination, the Nikkelverk refining facility in Kristiansand, Norway. To complicate matters further, with the mine located well north of the 60th parallel, even an icebreaker can reach the bay only eight months of the year.

Despite these challenges, Raglan continues to account for almost a quarter of Xstrata’s nickel production – more than 26,000 tonnes in 2007, according to the mine’s manager of sustainable development, Joël Pagé.

“We signed the original Impact and Benefits Agreement (IBA), called ‘Raglan Agreement (1995),’ with our Inuit partners in February 1995,” Pagé said. “At that time, we had estimated the mine to have 20 years of resources.We have been in production since 1997, and after 13 years, we still have 20-plus years of resources.”

Every year, Pagé explained, Raglan’s exploration program uncovers more than is mined in that year. There is also a strong expectation that this trend will continue. “The Katinniq plateau is virginal in terms of mining and exploration,” said Pagé. “Two-thirds of our property has not yet been well-explored.”

With such promising results, it is no surprise that Xstrata is looking to expand the mine to almost double its current production levels. Currently extracting 1.1 million tonnes of ore annually from its three underground mines and one open pit operation, Raglan has already received approval to increase production up to 1.3 million tonnes per year and is expected to reach that rate of production by the end of the year. But the final goal, according to a December press release, is to be producing a full two million tonnes as early as 2013.

To make such growth possible, explained Pagé, the government permit and the IBA – both currently capped at 1.3 million tonnes per year – would have to be renegotiated to allow for the increased production. The local communities are receptive to the idea and will benefit both in the form of profit sharing agreements and in direct employment.

“We are working in close partnership with the Makivik Corporation as well as the Kativik Regional Government and the Kativik School Board to create a new synergy in Nunavik,” said Pagé. “These stakeholder groups are working intensively and in cooperation with us to support the implementation of the second phase of our aboriginal employment strategy.”

The second phase, in the works for two years, has set the goal of employing 20 per cent or more Inuit workers from the local communities. At the moment, Pagé said, that number is closer to 17 per cent. It is not yet known how many additional workers will have to be hired for the expansion, but Pagé made a conservative estimate of 100 to be added to the current workforce of 620 workers and 250 contractors over the next five years.

To accommodate the increase in workforce, construction has begun on an additional 210 private rooms to house the workers. To match the growth, a new sewage treatment plant and power generating facility will have to be built, and the existing cafeteria space will need to be expanded.

“We are in the gap analysis stage,” said Pagé.Over the next three years, he added, the task will be in continuing to define the reserve and growing the operations based on that.

The continued success of the exploration program is vital to the expansion, Pagé added.“It creates a lot of optimism in the company. Every time we look we keep finding more, and we don’t know when it’s going to stop.”

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