The issue: Hope Bay mine sale
We say: Chinese cheques clear
Chinese influence in the Arctic, but what is the alternative? The concerns Yellowknife MLA Rylund Johnson has about the purchase of a Nunavut mine by a Chinese company are not unique, nor are they unfounded.
In 2005, similar concerns quashed a $6.7 billion deal that would have seen Ontario's Falconbridge, a nickel miner, acquired by China Metals Corp., a state-owned company. Falconbridge was already an international company, with 15,000 employees in 17 countries, but it was perceived as too important to fall into the hands of an organization ultimately controlled by a communist regime.
The deal fell apart and instead Falconbridge was sold along with its majority shareholder, Quebec-based Noranda, to Swiss Xstrata a year later.
The world has changed in a lot of ways since that dust up. Climate change is a bigger concern, as is the resource extraction industry's contribution to it. China has added between two and three Torontos to their population each year since, Canada's population has grown by just five million people the entire time.
Johnson worries about Chinese influence growing in the Arctic and that China is one of Canada's chief mining competitors. He refers to the concerns related to the growth of China's stake in Canada outlined by the Canadian Security Intelligence Service (CSIS), which include the potential for espionage and vulnerabilities in critical infrastructure.
The fact that the world is roiled in a pandemic that originated in China probably isn't helping. Unfortunately for all of us, the economic ruin it has wreaked has cast an even starker light on the harsh economic realities we're living with. There isn't exactly a lineup of companies from countries we like more ready to put the capital into Hope Bay that's needed to get it running at a profit again.
The purchase deserves careful scrutiny, which is why Canada has a robust review process. One thing that hasn't changed since 2005 is the central role mining plays in the interwoven economies of the North and the nation. About 600 people including Nunavummiut and Yellowknifers are employed at Hope Bay, which posted its first profit of $7.2 million in the first quarter of 2019 after more than half a billion dollars had been poured into it.
It would be great if a Canadian buyer could be found to take over the project. It would be even better if an Indigenous ownership group, as Johnson suggests, would step up and buy it.
But investment dollars are becoming few and far between when it comes to the North – especially in the NWT where projected exploration spending declined to $67.2 million in 2019 from $194 million in 2007.
Hope Bay is a Nunavut mine but it's proximity to Yellowknife make it an NWT concern. Shandong Gold Mining may cause eyes to roll, but with only economic uncertainty on the horizon, its proposed purchase can't be discounted.