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Agnico Eagle boss calls on feds to send right signal to investors

Don Wall
Agnico Eagle boss calls on feds to send right signal to investors

Gold miner Agnico Eagle has spent $7 billion on mine development in Nunavut in the past 13 years so when the firm’s president Ammar Al-Joundi issued a call to arms for the federal government to boost its support for northern development at a mining conference recently, his plea resonated.

Al-Joundi spoke during a Canada Day session March 2 at the four-day Mineral Exploration and Mining Convention held by the Prospectors and Developers Association of Canada in Toronto.

Agnico opened two new mines just last year in the Kivalliq district of Nunavut, supplementing its Meadowbank mine which has been in production in the region since 2010.

The value of the firm’s Kivalliq operations is such that Agnico Eagle’s production represents 25 per cent of Nunavut’s GDP; it has paid $110 million in royalties and fees to local Inuit associations with $550 million more to come in the next 15 years; it is Nunavut’s largest private employer; and last year the firm spent $500 million on goods and services in the local economy.

Those numbers are impressive, Al-Joundi said, but the potential of the region has barely been scratched.

Agnico Eagle and its Inuit partners, he said, “don’t agree on everything but we do agree on one thing — that the potential is massive and that we can make a difference. It’s time for a call to action on behalf of Canada’s North and attending events such as this can bring attention to the vast potential of the North.

 

It is a very expensive place to do business due to its remoteness,

— Ammar Al-Joundi

Agnico Eagle

 

“My objective today is to provide actionable insight for potential investors in the region, and to draw attention to what all government entities must address in order to unlock the true potential of Canada’s North.”

What is required, Al-Joundi said, is a government-led northern action plan.

“In order to realistically move forward, now is the time for governments to step up and invest in the future of Canada’s North,” he said. “Government must show leadership to move beyond words of aspiration and vision and develop realistic plans and make actual investments to advance the social and economic development of Canada’s North.”

With the support of its Inuit partners — with whom it has three benefits agreements — Agnico Eagle has accomplished much over the past 13 years but it hasn’t been easy, Al-Joundi said. Nunavut remains a very difficult place to operate a business, he said.

“It is a very expensive place to do business due to its remoteness and its limited transportation, telecommunications and energy infrastructure,” Al-Joundi remarked. “We must develop a northern action plan that unlocks critical barriers in the region and encourages further investment in people through education and training and in infrastructure such as roads, electricity, broadband, airport and port facilities.”

In early February the Canada Infrastructure Bank (CIB) announced it would offer technical support to the proposed Kivalliq Hydro-Fibre Link project involving the construction of a new 1,200-kilometre, 150-megawatt transmission line and fibreopotic cable between the Kivalliq region and Manitoba. Five Kivalliq communities and the three Agnico Eagle mines would benefit from the cheaper, cleaner hydroelectric power linkage and faster broadband.

The CIB, however, has not yet committed funding that the partners including the Kivalliq Inuit Association say is essential for the project to move forward.

“It would bring much-needed power and prosperity to Canada’s North,” Al-Joundi commented, noting the project could take a decade to develop.

In the interim, Agnico Eagle plans to develop a wind farm at the Meliadine mine in the Kivalliq district that would have Inuit proprietors.

Al-Joundi praised the federal government’s clean energy plan, its commitment to combining climate change policies with plans to boost Canadian competitiveness, and incentives to reduce the use of fossil fuels and decarbonize northern economies.

But a bigger statement needs to be made, he said, to convince international investors to spend their money on northern resources. Of the $7 billion Agnico Eagle has spent in Kivalliq, three-quarters has come from international investors and 100 per cent of its debt financing comes from outside Canada.

“These investors, while they are excited by the potential of the north…frankly they are a little anxious as they are getting mixed signals on Canada’s commitment to resource development,” Al-Joundi said.

“We need to make a compelling business case with the right fiscal, right regulatory and right environmental policies to bring in the capital necessary to unleash the North’s untapped potential.”

 

Follow the author on Twitter @DonWall_DCN.

Recent Comments (1 comments)

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Salima Virani Image Salima Virani

I could not agree more with this. Well said, Ammar. Let’s hope we can make this happen.

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