The Mary River Mine is an open-pit iron ore mine in the Mary River area of Baffin Island, Canada. It is operated by the Baffinland Iron Mines Corporation (BIMC). As of 2021, the operation consists of an open-pit mine, two work camps for hundreds of workers, a tote road—from the Mary River site to Milne Inlet—and port infrastructure at Milne Inlet. According to a 4-year study published in 2008, the Mary River Mine, with its four massive iron ore deposits of 65-70% pure iron ore, was "one of the most promising undeveloped iron deposits on the planet". It was not until technological advances were in place in 2010, and the market for iron ore had dramatically increased that sizable financial backing was available for the high cost of development in a remote region known for its inhospitable climate. The mine began operations in 2014, and the first shipment to Europe arrived in 2015. Baffinland is currently planning on expanding the mine. In February 2021, a group of Inuit hunters blockaded access to the mine for a week to protest the expansion.
In May 2021, a work camp for the mine experienced a COVID-19 outbreak, including the first cases of the highly transmissible SARS-CoV-2 Delta variant in the territory.
Background
The Mary River area has "long been known to Inuit as Nuluujaat, a landmark used to travel through North Baffin Island" in what is now known as Qikiqtani Region, Nunavut.
The Mary River property contains four iron ore deposits, numbered 1, 2, 3 and 4 that contain high grade direct shipping iron ore (DSO), with ore grades between 65% and 70%. Because they require no further processing to be used in blast furnaces for steel-making they are priced higher than lower grades. The iron ore body was identified in 1962 by Murray Edmund Watts, who was the regional head of Baffinland predecessor company—British Ungava Explorations Ltd. (Brunex). Watts had sighted Mary River's four massive iron ore deposits—large black circles of 65-70% pure iron ore—from his Cessna airplane. Watts died in 1982, and had never been able to find investors for the project. In 1986, a private company, Baffinland Iron Mines Ltd., held the Mary River Project claims and leases.
In 1978, Gordon McCreary submitted his Queen's MBA thesis on the feasibility of developing iron ore in the Mary River area with a focus on transporting the iron ore in Arctic conditions to tidewater by permafrost land, and by sea through packed ice. Richard McCloskey, who became Baffinland's CEO in 2010, had been friends with McCreary in the engineering department at Queen's in 1969. In 2002, McCreary and McCloskey gained a controlling interest in Baffinland. They took it public in 2004, and established Baffinland Iron Mines Corporation. Baffinland then had the funds to complete testing and surveys, and they confirmed the purity of the ore at 65-70% pure and the potential of the resource—337 million tons. The Mary River Mine was "one of the largest undeveloped iron ore deposits in the world". By 2006, the price of iron ore increased as there was a global shortage for the first time since the 1970s. It was at this time that interest in developing iron ore mines in both the Labrador Trough, near Schefferville, Quebec and in Mary River had increased.
In or around the mid-2000s, BIMC presented a proposal to the Qikiqtani Inuit Association (QIA)—the regional Inuit organization authorized by the Nunavut government, that represents Inuit in the entire Baffin Island area—for the Mary River project. The proposal was for an open pit iron ore mine, to be developed and exploited on Inuit-owned land (IOL). The proposal, which was informed by the commissioned report, estimated a total cost of CA$4.1 B, and included a CA$1.2 B cold-weather railway running south—the South Railway—from the mine to a CA$0.7B deep-water all season facility in Steensby Inlet in southern Baffin with a planned production of 18 million tonnes per annum (MT/a). By September 2006, a QIA member vocally supported the development of the Mary River project, saying that, "You're talking about [jobs] for your grandchildren—and their grandchildren." By 2006, Baffinland began investigating the feasibility of a cold-weather railway from the Mary River to a mining port and by 2006, Canarail had provided an estimate of CA$350 million to build the railway. Baffinland had considered two options—a North Railway and a South Railway—a route to Milne Inlet and a route to Steensby Inlet.
Canadian context As of 2009, Canada, with 7.9 billion tons of iron ore reserves, had nearly 42% of the global iron ore resources. The majority of the iron ore in Canada comes from Nunavut's Mary River Mine and from Schefferville, Quebec, which is in the Labrador Trough. In 2017 Canadian iron ore mines produced 49 million tons of iron ore in concentrate pellets and 13.6 million tons of crude steel. Of the 13.6 million tons of steel 7 million was exported, and 43.1 million tons of iron ore was exported at a value of $4.6 billion. Of the iron ore exported 38.5% of the volume was iron ore pellets with a value of $2.3 billion and 61.5% was iron ore concentrates with a value of $2.3 billion.
In 2011, the Government of Canada, under the direction of the Conservative majority government of Prime Minister Stephen Harper, fostered Arctic exploration and industrial mining as the "beacon of the future" that would "unlock development possibilities in the North." By 2013, "mineral exploration funds" had begun to "dry up" and new development was being scaled back across Northern Canada. In their 2013 book Northern Canada : history, politics, and memory, the authors said that Baffinland's "massive Mary River project was the most dramatic example—Baffinland "radically curtailed its investment and development plans, cancelling a proposed railway and port development...and scaling back its project investment to $740 million from an initial projection of $4 billion."
Iron ore market The iron ore market is volatile and subject to fluctuations, because it is abundant worldwide. The iron ore industry is cyclical.
In 2008, shipment figures of iron ore "broke historical records at US$6.2G" and mining investment reached US$2G. By 2011, China accounted for half of the global production of iron ore, used mainly for steel-making and export. By 2011, iron ore mining in Quebec's Labrador Trough was experiencing a comeback—development projects included Arcelor Mittal's Port-Cartier and Fermont and Schefferville.
From 2010 through 2013, the global price of iron ore was about US$150 a tonne; it reached a peak of US$177 in August 2011.
Arcelor Mittal Canada—formerly Québec Cartier Mining Company—has a huge Fermont, Quebec iron ore mine complex at Mont-Wright that is similar in scale to the Mary River iron ore project, that it now also co-owns. Arcelor Mittal operates its private railway, the Cartier Railway connecting to Fermont the mine. In 2011, ArcelorMittal—the owner of Hamilton, Ontario's Dofasco—invested $2.1B in the expansion of Fermont iron ore mine complex. By May 2011, the Luxembourg-based ArcelorMittal Group—the world's largest steel producer and the co-owner of Baffinland—had plans to increase its annual production of iron ore concentrate from "14 million tons to 100 million tons by 2015".
The price of iron ore declined to US$60 in 2014. It reached US$128 in August 2020.+Global price of iron ore in US$ per dry metric ton unit (Statista)20032004200520062007200820092010201120122013201420152016201720182019303662738014597146168128135975558727094
Construction
By 2007, construction of a tote road connecting Mary River mine to Milne Inlet was already underway. Milne Inlet is a shallow inlet that was only ice-free from August to October and opened onto the environmentally sensitive waters of Eclipse Sound and the protected waterways surrounding Bylot Island and Sirmilik National Park, for which Pond Inlet is the gateway hamlet. According to David K. Joyce who visited the site in the summer of 2007, the road was expected to carry hundreds of 200 tonne dump trucks per day, every day, for several decades. By August 2007, the US subprime mortgage crisis had negatively impacted Canadian commercial paper, causing it to suddenly crash. With 95% of Baffinland's CA$45.9 million invested in commercial paper—which would normally be very reliable—they had to get an emergency line of credit to pay for provisions for the hundreds of workers, fuel and equipment. McCreary, who served as the company's CEO from 2004 until March 2010, began to seriously seek out investors. Shipping the ore seemed to become more viable as the Arctic sea ice was shrinking.
A 4-year long $170 million commissioned feasibility study, submitted in February 2008, was described by the Canadian Mining Journal as "robust". The report said that the first deposit of iron ore alone would "last between 20 and 34 years" if they shipped between 18 and 30 million tons annually. Because of the purity of the iron ore, there was no processing required so it was direct-shipping. There would be less environmental impact.
In 2008, a joint venture agreement was signed with Nunavut Tunngavik Incorporated and a memorandum of understanding was signed in 2009. At that time, Nunavut Tunngavik controlled the resource exploitation of Inuit owned lands. The agreement allowed Baffinland exploration and resource development rights to of Inuit-owned land adjacent to the mine-site.
Their initial 2008 development, which was based on the recommendations of 4-year study, anticipated initial production of 18 million tonnes per annum (MT/a) and construction of a CA$1.2b -long cold weather the South Railway, where they would also build a new C$0.7b port facility at a total estimated cost for the project of CA$4.1 billion. The proposal had included a South Railway to an "all-season deep-water port and ship loading facility at Steensby Inlet" where the iron ore would be shipped through the Foxe Basin.
Public consultations were held in April 2007 in Pond Inlet, Arctic Bay, Cape Dorset, Clyde River, Igloolik, Hall Beach, and Kimmirut—the hamlets that were "most impacted" by the project.
A crucial part of Baffinland's plan was to use nine 190,000-tonnes icebreakers, making a trip every second day year-round, in a shipping route from the proposed Steensby Inlet, through Foxe Basin and Hudson Strait to markets overseas—which would be "unprecedented in Arctic shipping history". Baffinland hired Fednav, a Canadian company headquartered in Montreal, which was at that time the only company worldwide that was operating in the Canadian Arctic year-round. At the 2009 NIRB public hearings in Igloolik—which is near the proposed marine shipping route from the proposed Steensby Inlet port—the major concern was the impact of the icebreakers operating year-round on marine life in particular, and the environment in general.