March/April 2011

Aboriginal Perspectives

Servicing the North: Aboriginal-owned transport companies fulfil mining industry needs

By Virginia Heffernan

 

NRT driver Troy Webb hauling crushed lime from Saskatoon to Areva Resources Canada’s McClean Lake Mine for use in the milling process | Photo Credit: Dale Peacock


Access to reliable transportation can make or break a mining project. The Jericho diamond mine in Nunavut, for example, got off to an inauspicious start in 2006 when a melting winter road choked shipments of fuel, explosives and other necessities. Despite several attempts at revival, the mine never really recovered from the opening blow and closed before its second birthday.

Whether transportation partnerships with First Nations groups in the remote territory would have made a difference to Jericho’s fate is debatable, but the advantage of having partners familiar with the lay of the land is not. Because the majority of Canadian mines are located in the North, it is logical for exploration and mining companies to partner with transportation companies run by northerners who, in most cases, are Aboriginal.

Proximity = opportunity

There are clusters within Canada where Aboriginal communities have a strong presence in transportation for the mining industry, for example, in centres near the uranium mines in northern Saskatchewan, the diamond mines and exploration camps of the Northwest Territories and Nunavut, and the gold, base metal and iron ore mines of northern Quebec and Labrador. And there are opportunities elsewhere.

Success comes down to three main factors, says Dave McIlmoyl, vice-president of Saskatoon-based Northern Resource Trucking (NRT), a joint venture between 12 First Nations and Métis groups and Calgary-based Trimac Transportation: a history of commercial enterprise; a strong Band council that fosters entrepreneurship; and the opportunity to service the mining industry, because of proximity and/or help from provincial or federal initiatives.

“Saskatchewan Indians have been organized politically since the 1930s, and you tend to find that with a strong political organization there is a strong entrepreneurial spirit,” says McIlmoyl. He adds that the Cree, the largest First Nations group in Canada, is particularly endowed with this spirit because of their history of being heavily involved in the fur trade. The Lac La Ronge band is the largest Cree band in Canada and the largest partner in NRT, which transports supplies to gold and uranium mines in northern Saskatchewan using a fleet of 80 trucks. McIlmoyl says NRT would never have gotten off the ground 25 years ago if the Saskatchewan government had not made support of northern business a condition of giving the go-ahead to the Key Lake uranium mine.

Another well-established transport company with Aboriginal ownership is Kanata-based First Air. In 1978, special legislation in Quebec gave First Air’s owner, Makivik Corporation, the mandate to administer the compensation funds resulting from the first comprehensive Inuit land claim in Canada, the James Bay Northern Quebec Land Claim Agreement.

Inuit-owned Makivik bought First Air in 1990 and since then, the airline has grown to become the third largest in Canada with more than 1,000 employees, almost half of whom live and work in the North. First Air’s Hercules aircraft are dedicated to supplying the mining industry in Nunavut and the Northwest Territories, from the gold exploration camps at George Lake and High Lake to the Snap Lake diamond mine and the Meadowbank gold mine. This year, the airline is expanding its service and Aboriginal partnerships to serve the mining and mineral exploration industry in two of Nunavut’s three regions where there are several development and advanced-stage exploration projects in progress.

In the Kivalliq Region, First Air has teamed up with Sakku Investments Corporation to launch Sakku First Aviation Ltd., a joint venture airline headquartered in Rankin Inlet. Sakku is the business arm of the Kivalliq Inuit Association. The region hosts Agnico-Eagle’s recently opened Meadowbank gold mine and its advanced-stage Meliadine gold project, as well as Areva Resources’ Kiggavik uranium project.

In the Qikiqtani Region, the airline has an agreement with Qikiqtaaluk Corporation (QC), an Inuit-owned birthright development corporation, to start a new airline to be named Qikiqtani First Aviation Ltd. The region hosts Baffinland Iron Mines’ iron ore deposit and Peregrine Diamonds’ Chidliak diamond exploration property.

Another key mode of transport for bulk mining projects such as Mary River is shipping by sea. Last year, QC teamed up with Quebec-based Ocean Group to form Tulaktarvik, an Inuit-owned company that provides ice-class harbour tugs, barges for cargo and related services for Nunavut communities and the mining industry.

There are also opportunities opening up in the iron-rich region of northern Quebec and Labrador, where several advanced-stage exploration projects are underway. In 2005, the Innu Nation of Matimekush-Lac John, the Innu Takuaikan Uashat mak Mani-Utenam and the Naskapi Nation of Kawawachikamach formed Tshiuetin Rail Transportation (TSH) to become Canada’s first Aboriginal-owned railway.

Seeing an opportunity for social and economic development in the impoverished area, TSH purchased a 217-kilometre stretch of track running from Schefferville, Quebec, to Emeril Junction, Labrador, from the Iron Ore Company of Canada (IOC), the country’s largest iron ore producer. Emeril Junction is close to IOC’s mine, concentrator and pelletizing plant in Labrador City, where phase 2 of an expansion program is underway. TSH provides all passenger service to and from the area.

Northern development

“The biggest challenge of servicing the mining industry is the cyclical nature of commodity prices, as mines are threatened with closure during a down cycle,” says McIlmoyl. He remembers a lean period not so long ago when the uranium price dipped below $20 per lb U3O8 and stayed there for several years. NRT scraped through, but with costs of $650,000 for a truck and trailer, McIlmoyl is grateful to be back in an environment of rising uranium and gold prices.

Future opportunities will depend on federal, provincial and/or territorial government support for infrastructure building – whether that be ports, roads, railways or airports – that allow Aboriginal transportation enterprises to blossom. For example, Nunavut is currently proposing a $1.2 billion, 1,200-kilometre road linking Manitoba to Kivalliq.

“We must now consider infrastructure not only based on community needs, but on the development of industry,” said Shawn Maley of Nunavut Airports, Economic Development and Transportation, in a presentation at the Kivalliq Trade Show last November. “This includes marine roads to access resources and improvements at our airports.”

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