Vital Metals has gone silent on the North Slave Métis Alliance (NSMA).
The Australian firm owns and operates a portion of NWT’s Nechalacho rare earths mine, and lists NSMA as a community stakeholder for the project on its website.
However, communication between the two parties has ceased since Vital sold a 9.9-percent ownership stake – and all the resource it has extracted from the mine to date – to a subsidiary of Chinese rare earths company Shenghe Resources last year.
“Until last spring, Nechalacho’s leadership always went the extra mile to ensure transparent engagement and maximize Indigenous contracts, jobs and training,” NSMA President Marc Whitford said. “We would hear from them often — sometimes, just a call or a coffee; other times, a site visit or formal meeting. We were never surprised.
“Since the changes in Vital’s board and management, we have not yet heard from Vital,” he added, revealing that NSMA learned about the changes to Vital’s operations “through the media.”
Vital’s deal with Shenghe Resources was the final development in a turbulent 2023 for the company, which also saw it terminate plans for a processing plant in Saskatoon after spending almost $20 million on its construction. On Jan. 18, Regina radio station CJME reported that Vital Metals was in the process of liquidating those Saskatchewan-based assets.
Before its deal with Shenghe Resources, which is partially owned by the Chinese government, the homepage of Vital’s website proclaimed that the company aimed to “become the lowest cost producer of mixed rare earth oxide outside of China.” The website still includes links to multiple news articles that positioned a Vital-owned Nechalacho as an alternative to China’s rare earth’s sector.
Whitford called Vital’s decision to share ownership with Shenghe “a shift in focus from Canada, friends and allies to foreign entities.”
“Former CEOs Don Bubar and Geoff Atkins had a vision that we, as impacted Indigenous groups, would own significant equity in the project and participate on the board of directors,” he said. “We were always told our Indigenous support would allow the NWT to supply Canada, its friends and allies with critical minerals to enable the green economy and address climate change. We were assured minerals from the NWT would be treated with the highest ESGI (environmental, social, governance and Indigenous) standards from mine to market.
“The NSMA hopes that whoever controls Nechalacho will keep the original vision alive for the good of the NWT and our country.”
Bare minimum not enough
Whitford is not alone in his sentiment that Vital Metals has failed to properly engage with its Indigenous stakeholders, which also includes the Tlicho Government, Deninu Kue First Nation, Lutsel K’e First Nation, and Yellowknives Dene First Nation (YKDFN).
Kieron Testart, the MLA for Range Lake and a former director of economic development for YKDFN, shares that opinion, contending that he has “great concerns” about Vital’s recent changes.
Having parted ways with YKDFN to return to public office, Testart said he could not speak on the First Nation’s behalf, but admitted that, as far as he’s concerned, the memorandum of understanding between the Australian company and the Indigenous group “hasn’t been honoured.”
“We’re moving into an era of free, prior and informed consent with First Nations around what happens on their land and traditional territory,” he said. “Is it appropriate for a company to abruptly change their tactics and make unilateral decisions without providing consent and consultation with their First Nations partners there?
“The bare minimum isn’t enough,” he continued. “We need to do more, and doing more is making sure that when you sell a First Nation on a project that involves local jobs for local people, and a supply chain that supports Canada’s international interests, and then you abruptly shelve that supply chain and sell to a company controlled by Chinese interest that has nothing to do with the original proposal, you have an obligation to explain that.
“You probably have an obligation to explain it to everyone in the Northwest Territories, but in particular, the First Nations of whom your project is a guest on their land,” he said.
A larger problem
Testart called Vital’s recent failure to communicate with impacted Indigenous groups one of “two big issues” surrounding its operations at Nechalacho.
The other issue, he said, is that the NWT can seemingly “only get development in our minerals industry from state-owned firms in China, and not from North American companies that are friends and allies.”
The solution to that issue, he contends, is “making the Northwest Territories the most attractive place to invest,” and the responsibility for that is largely outside Vital’s hands.
“We have world-class resources, but we don’t have a world-class investment plan,” he said. “We can’t just sit back and expect our resources to speak for themselves.
“We need to champion our industry as the best place to do business in Canada, and that’s going to take a bunch of work,” he added. “We need to make the Northwest Territories be most attractive place for investment from our friends and allies as possible, so we don’t have to rely on unfriendly foreign actors like Russia and China to back up our projects.”
More silence from Vital
Vital was contacted for comment about its deal with Shenghe Resources, which has been a source of significant controversy among NWT residents and in the media in recent months.
Geordie Mark, who was appointed as the company’s managing director and CEO just prior to the announcement of the Shenghe deal last October, agreed to “have a look” at some questions about the company’s current situation, but did not respond to any of NNSL Media’s nine questions prior to publication deadline, which he was made aware of in advance.
Despite the company’s silence on its controversial deal with a partially state-owned Chinese company, Testart believes there is still hope for Vital Metals’ operations at Nechalacho.
“This [deal with Shenghe] is not a controlling interest in the project – yet,” he said. “If we can make the Northwest Territories a place that people are rushing to invest in, then Vital should be able to find other resources.
“If we can make sure that those investments are working for Canada, and for the Yellowknives Dene, for the Tlicho, for the NSMA, for all Indigenous people, then it will be a win. So the positive news is, we can say, we don’t want this to happen again, and we’re going to take serious and swift action to ensure it doesn’t.”