Avalon Rare Metals’ proposed development at Pine Point is on track to begin production by 2017, but the company needs money to move forward with the next phase of the project.
That was the message to the Hay River Chamber of Commerce on May 28.
The company provided an update on the status of the site and answered questions from the Hay River business community during a lunchtime presentation at the golf club.
“This is really a great opportunity for our town,” Mayor Andrew Cassidy told The Hub. “Avalon is doing things differently, and I think really setting the bar for community investment and buy-in in the North.”
Avalon plans to mine heavy rare earth minerals – used in many eco-friendly technologies such as hybrid cars – at Thor Lake on the north side of Great Slave Lake, and process them at a hydrometallurgical facility at Pine Point, using and building on the existing infrastructure from a previous mining operation to decrease the contamination and cost of the project. The company claims the operation will create over 300 direct jobs in the NWT, 120 of them on the south side of the lake, and usher in greater opportunities for local transportation and service outfits, as well.
“Both the CN rail line and NTCL (Northern Transportation Company Limited) will see a boost,” Avalon’s vice-president of exploration Bill Mercer told chamber members, adding the rail line is particularly advantageous as it connects to the entire North American network, including Geismer, Louisiana, where the rare earth minerals will be further processed.
NTCL would gain a contract for barging the entire output of the mine on the north side of Great Slave Lake, meaning several shipments a day during the summer months.
Companies seeking contracts with Avalon for services and supplies would be required to meet certain criteria, among them International Organization for Standardization (ISO) and Global Reporting Initiative (GRI) certifications, for both health and safety accreditation and environmental responsibility.
The company has to be concerned about health, safety and environmental issues, not just because it’s the right thing to do, but because it’s good business, said vice-president of sustainability Mark Wiseman, explaining that, because rare earths are used in many eco-friendly technologies, the companies buying the minerals demand environmental accountability and sustainability from their suppliers.
While it was not discussed at the meeting, Kelly Cumming, Avalon’s manager of northern relations, told The Hub that the company would be seeking participation from communities in the South Slave, particularly Hay River, Enterprise and K’atlodeeche First Nation, in potential limestone development.
“If the project proceeds, Avalon may require lime for its proposed hydrometallurgical facility,” she stated in an e-mail. “Avalon is helping the NWT business community and K’atlodeeche First Nation to understand the potential opportunity to supply this lime, since there are local sources of limestone.”
While supplying power to both the mine and the hydrometallurgical facility remains an outstanding problem, Mercer claimed the most immediate challenge facing the project is raising $20-$30 million to finance specialty equipment that needs to be ordered long before production begins, such as the mill itself.
The Avalon executive stated the company has spent $90 million in the NWT so far – $60 million of which was on the recently-released feasibility study – and currently has $15 million in the bank to continue funding further work at the site. If the project proceeds, Avalon will spend about $1 billion in the territory in capital.
With production still at least four years away, and many steps in between, the future of Pine Point remains uncertain. However, Avalon is intent on creating and maintaining good communication with northerners throughout the process.
“Relations have to be good,” said Wiseman. “If not, local communities can slow down and even stop development. It’s the right thing to do, but beyond that, it’s about the bottom line.”
Cassidy said that, while the company made an engaging sales pitch, he also believes its commitment to obtaining local involvement is genuine and hopes to see it reproduced in the future with other ventures.
“I think more companies are seeing that there are opportunities for partnerships with aboriginal and other local communities,” the mayor said. “And that those partnerships are an important advantage.”
— Sarah Ladik