Aboriginal groups continue to raise concerns over a proposed rare earth metals project near Yellowknife.

On Monday, the federal government gave the green light to the Nechalacho project, owned by Avalon Rare Metals Inc. The proposed underground mine is located at Thor Lake, about 100 kilometres east of Yellowknife. It could operate for at least 20 years and create hundreds of jobs.

This summer, following the completion of the project’s environmental impact assessment, some groups cited a lack of consultation and concerns about long term impacts to wildlife.

In a letter, the Yellowknives Dene First Nation said, "with a single exception, this report ignores all of the concerns the YKDFN brought forward to the board," and it failed to acknowledge a motion passed by the leadership that "outright rejects the current project proposal."

Yellowknives Dene First Nation's Chief Edward Sangris says there are still a lot of questions today. “On the caribou, the barging route… the water monitoring…" Sangris says. "So all we can do now is wait and watch and see what the company will do.”

'What we’re looking for is even a commitment from the mine, stating that yes, you’re gonna have these contracts.' - Garry Bailey, president, N.W.T. Metis Nation

Garry Bailey is the president of N.W.T. Metis Nation. He worries aboriginal groups don't have enough information to take full advantage of the economic spin-offs.

“What we’re looking for is even a commitment from the mine, stating that yes, you’re gonna have these contracts,”Bailey says. “Then we can go the bank, we can get loans, then we can purchase this equipment.”

Bailey would also like to know where and how Avalon plans to process the heavy metals. The original plan called for a facility at Pine Point. After the environmental review process, Avalon announced that may not happen. The company now says it's in the process of finalizing a decision.

Avalon admits it could have held more community information sessions, but says it will continue to hold more information sessions in communities that want more information. 

Don Bubar is Avalon's president. 

"We feel that we have accommodated all of the main concerns in the report of the environmental assessment and responsible Ministers agreed," Bubar says. "But... we will continue to demonstrate that we are going to meet our commitments and implement the measures that we are required to do, to take the upmost care to not create any unwanted adverse impacts."

The company says it’s currently discussing impact benefit agreements with four different groups.

Green light may attract investors

With federal approval, the Toronto-based company is now turning its attention to raising the $1.5 billion it needs to build the mine. 

Bubar says drumming up financial support has been slower than they hoped, partly due to the state of the economy, but also due to the uncertainty of the regulatory process itself.  

“The permitting process was viewed by investors as a significant risk factor in the project’s schedule,” Bubar says. “Having this approval removes that as a risk."

If it can find the money, Avalon will start some construction on site next year with production starting in 2017.

The company still needs to get land and water permits before it can start operations.

Avalon says Nechalacho will help fill the global demand for heavy rare earths as China's supply runs out in the next 10 to 15 years. Rare earth metals are used in computers and large magnets.