Whitehorse Daily Star

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NEW OPPORTUNITIES – Brendan Marshall, left, of the Mining Association of Canada says opportunities to secure financing for roads and energy infrastructure in the North may be ripening up in Ottawa. Centre Kells Boland, right Michael Catsi

North may benefit from infrastructure plan

Ottawa’s new plan for investment in infrastructure could fit nicely with the needs of the North, says Brendan Marshall of the Mining Association of Canada.

By Chuck Tobin on November 30, 2016

Ottawa’s new plan for investment in infrastructure could fit nicely with the needs of the North, says Brendan Marshall of the Mining Association of Canada.

Marshall and others were part of a panel discussion on Access and Energy Infrastructure during last week’s 44th annual Yukon Geoscience Forum.

Details about the Transformational Infrastructure Plan announced early this month by federal Finance Minister Bill Morneau still needs to be flushed out, said the association’s vice-president of economic and northern affairs.

He pointed out, however, that at first glance it looks like there could be a handful of avenues available to access funding for northern projects.

Morneau announced $66 billion will be directed to five different envelopes over 11 years and another $15 billion is being used to kickstart the Canada Infrastructure Bank, Marshall explained to the audience.

He said three of the five envelopes are of particular interest to the mining industry:

• Green infrastructure – $21.9 billion;

• Getting products to market – $10.1 billion;

• Rural and Northern Communities – $2 billion.

Joining Marshall for the panel discussion was Yukon Energy president Andrew Hall, who told the audience of the desperate need to replace the transmission line between Mayo and Keno City.

It’s well past its service life and is literally falling down, Hall said.

He said in considering its replacement there are a couple of options.

They include replacing the old section with a larger-capacity line and upgrading the line from Mayo to Stewart Crossing to a larger capacity, he said. He said it could be done all at once, or in phases

Hall said the intent is to ensure the transmission line is large enough to supply the needs of future mines in the area with green, renewable hydro power.

Yukon Energy, he said, has surplus energy in the summer that it would love to sell.

But the options range in price from $26 million to $86 million, and there will be a need to seek funding assistance from the Yukon and federal governments, he said.

Hall said the design and permitting work funded by a $5.3-million contribution from the Yukon government is almost complete, and the project will be shovel-ready before the end of March.

“The vision here is to invest in some infrastructure for the long-term future that can connect more than just Victoria Gold.”

Mining, Hall told the audience, has been the catalyst behind the development of Yukon’s energy infrastructure.

Kells Boland, chair of Yukon Energy’s board, presented the $500-million proposal developed by the Yukon’s mining community and the Yukon government to upgrade roads to reduce the cost of getting goods to market.

The Yukon Resource Gateway Project calls for upgrading the placer mining road running south from Dawson and extending the Freegold Road running north from Carmacks.

The improvements are intended to improve the economics of the proposed Casino mine and Coffee gold project purchased last summer by Goldcorp.

The gateway project also involves improvements to the Nahanni Range Road to improve economics of the proposed Selwyn project.

Boland explained of the $500 million required, the Yukon is looking for $250 million from Ottawa, $125 million from the Yukon government and $125 million from private industry.

The mining association’s vice-president told the audience the creation of an infrastructure bank is also a positive sign, though more still needs to be learned about the details.

The mining community has been looking in recent years to Alaska’s infrastructure bank as an example of a publicly owned financial institute that provides private financing – loans – to assist private companies with their projects.

When the state’s huge Red Dog mine was built in the late 1980s, it needed help to finance the haul road and the port facility. The Alaska Industrial Development and Export Authority provided the required loan through a 50-year flexible financing arrangement.

AIDEA’s Michael Catsi was part of the panel discussion again this year to explain AIDEA’s role.

It operates at arm’s-length from government, is now self-sustaining with its own money and is managed on the principle of generating more revenue that can be re-invested into more projects to build the economy.

AIDEA now has $1.4 billion in assets and has paid the state $380 million in dividends over the last 20 years, Catsi explained.

He said AIDEA does not operate on the hope that if it’s built, they will come.

The authority requires significant skin in the game by the private sector, he said.

Marshall said exactly how Ottawa’s federal infrastructure bank will function isn’t clear yet.

The lack of energy and transportation infrastructure in the North push up the cost of mining in northern areas between two to six times what the project would cost in the south, he said.

Marshall showed the audience how mining operations north of the Arctic Circle in other circumpolar countries like Finland are much more competitive because they have fully serviced infrastructure.

And as others mentioned during the geoscience forum, Marshall said research shows mining is the largest private sector employer of indigenous people.

He also emphasized how the focus in Ottawa these days is very much on reconciliation with the country’s indigenous people.

“And in that respect, we view infrastructure investment in the North as a key component that will advance opportunities for indigenous people in the North.”

Comments (1)

Up 12 Down 10

yter on Nov 30, 2016 at 8:27 pm

Wolverine has closed, and YG is still working on the upgrading of the Campbell highway that was started just for Wolverine (thanks Dennis).
More subsidies for the mining companies. A handout by any other name eh?

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