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Inuit stake in Arctic mines raises fears of environmental conflict

Source: The Canadian Press

By Bob Weber

16 April 2010 - Inuit land-claim groups have formed a company to invest directly in Arctic resource development in an effort to win more benefits and ensure that a greater share of mining profits remains in the North.

"We are looking at direct equity participation," said Charlie Evalik, head of the Kitikmeot Inuit Association, one of three groups that have come together to form the Nunavut Resources Corp.

"We now want to move up the mineral resource value chain to ensure that the people of Nunavut get more from their own resources."

While industry welcomes the move, environmentalists warn it could lead to serious conflicts of interest.

Until now, Inuit have benefited from mining solely through the jobs and training that new mines or exploration camps provide. Evalik said that leaves his people powerless to move mineral projects ahead and shuts them out of profits from resource sales.

Kitikmeot, as well as Nunavut Tunngavik Inc. and the Kivalliq Inuit Association, have raised just over $1 million and are looking for another $2 million in one-time funding from the federal government.

The cash would become working and seed money to enter private capital markets and raise dollars for individual projects. None of the money would come from land-claim settlements.

The company will probably start by building infrastructure, Evalik said.

"Say we build the airstrips and roads and lease it back to the mining company. We'll build and own the camp infrastructure or build and own oil tanks and lease them back."

The corporation is already in talks with Newmont Mining, which is developing the Hope Bay gold project in Nunavut, Evalik said.

A similar strategy is being used in the Western Arctic, where several aboriginal groups have formed a corporation and used private capital to buy a one-third share in the proposed Mackenzie Valley natural gas pipeline.

It's a good idea, said Rick Meyers of the Mining Association of Canada.

"One might expect that aboriginal groups would want to invest in the industry," he said. "I don't think the industry would have issues with them acquiring equity. They would be looked at seriously."

Aboriginal communities across the country are growing more familiar with mining and more comfortable with how to assess risks and benefits, he said. It's a good time for such proposals as industry confidence returns and activity picks up with the recovery in the global economy.

But Sandra Inutiq of the Nunavut-based environmental group Makita points out that these same land-claim groups also appoint representatives to the regulatory boards that make decisions on mining developments. Those same groups also negotiate impacts and benefits agreements between miners and local Inuit.

That could create conflicts of interest, she suggested.

"When there's any administrative body, they have to be independent and unbiased. It seems by creating this company ... the bias aspect, whether it's perceived or actual, is worrying."

For the complete article, please see The Canadian Press.