North

Canada waives annual mineral lease fees on Crown land in Nunavut

In a measure to reduce the economic impact of the COVID-19 pandemic in Nunavut, the federal government is waiving payments for mineral leases on Crown land.

Chamber of mines says $1.5M relief will protect exploration economy and investors

The Mary River Mine site on northern Baffin Island. The federal government is waiving annual mineral leases in Nunavut this year. (Submitted by Baffinland Iron Mines Corporation)

In a measure to reduce the economic impact of the COVID-19 pandemic in Nunavut, the federal government is waiving payments for mineral leases on Crown land. 

Federal Northern Affairs Minister Dan Vandal announced the change on Aug. 13. Mining and exploration companies that hold mineral leases in the territory will have to apply to have the annual payments waived for the current fiscal year. 

This relief for waived leases is valued at around $1.5 million, said Ken Armstrong, president of the N.W.T. and Nunavut Chamber of Mines.  

While the leases themselves aren't that expensive — around $2,500 to $5,000 annually depending on the amount of land leased, according to Armstrong — he says the move will help mining and exploration companies that can't do work this season because of COVID-19. 

"With mineral claims you have to be able to conduct a certain amount of work and prove that you've done it every year in order to maintain the claim," he said. That requirement is mandated by the federal Nunavut Mining Regulations.  

Large companies like Agnico Eagle, Baffinland and TMAC Resources continue to operate. 

But it's harder for small exploration companies that hold leases to do work this summer, Armstrong said, because Nunavut's border remains closed.  

About 500 leases in Nunavut

There are about 500 mineral leases held in Nunavut. The lease payments are being waived through a formal ministerial order. 

"If tenure holders can't actually access their claims or their leases as a result of the pandemic, it would be unfair for them to potentially be in a position where they could lose them for not doing the work that was required, or for paying the rent," said Armstrong. 

The change makes sure that companies are not penalized for not using their leases, and provides reassurance to their investors, he said

"What it's telling investors is that the companies are not at risk of losing their tenure simply because they can't access their properties and do work," he said.

While Natural Resources Canada has projected that exploration in Nunavut would be down this year, Armstrong says the mining economy created by operating mines is strong despite the pandemic. 

But there is a large cost associated with enforcing health and safety measures related to COVID-19, he said. 

Agnico Eagle and Baffinland have been paying wages for Nunavummiut workers who were sent home to avoid contact between the communities and out-of-territory workers. 

There is also on-site testing for all workers coming in on rotation to the mine. 

Vandal applauded Nunavut mining companies for these measures. 

"Our government truly understands the impact that the pandemic has had on the mining industry across the North, especially in Nunavut," Vandal said. 

Mineral lease holders are also given an extension for any payments that were, or are, due between May and October 2020, and payments already made will be waived the following year, Vandal said.

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