The Mackenzie Valley Review Board has approved Avalon Rare Metals' Nechalacho project, located about 100 kilometres east of Yellowknife.

Avalon wants to build a mine at Thor Lake and a secondary processing facility at Pine Point. The company plans to ship chemical concentrate by rail to a refinery in the United States.

In a news release, the board said it concluded the project is likely to cause significant adverse environmental impacts, but the impacts would be minimized by measures set out by the board.

They include:

  • ensuring the water released from the project does not cause significant impacts
  • requiring a wildlife and wildlife habitat protection plan and monitoring
  • the signing of a socio-economic agreement with the Government of Northwest Territories before construction begins

The company says the property is one of the largest undeveloped deposits of rare earth elements in the world.


Members of the Mackenzie Valley Environmental Impact Review Board listen at public hearings in Yellowknife into Avalon Rare Metals' Nechalacho project. (CBC)

Avalon president Don Bubar says the project could one day put the territory on the global map.

"[Rare earth elements] are vital to many, many new technologies — modern electronics, energy efficiency in automobiles. We're going to need more and more of them and there are relatively few [deposits] outside China."

Avalon says the project could create up to 300 jobs.

But there is some opposition. Last February, Yellowknives Dene passed a motion saying they don't support "development of the Thor Lake project on Chief Drygeese lands," citing a lack of consultation.

A feasibility study released in April showed Nechalacho would cost $1.5 billion dollars to mine.

The company also needs to find a buyer to bring the product to market.

The federal government will have the final say if the mine is approved to go ahead.