STAGE 3: CONSTRUCTION

Construction refers to the building of an entire mining facility: the mine itself, the processing plant or “mill,” and all the roads, rails, sewer and water lines, housing (or “infrastructureInfrastructure: the basic facilities, equipment, roads, transmission lines, sewage, water, and other installations needed to support the functioning of a mine.”) needed to support the operation. This stage takes place after all the permitsPermits: legally-binding permissions that govern activities that may occur during exploration or mine operation, like quarrying, use or impact on water, building of transmission lines, etc. and regulationsRegulations: rules that govern activities that are occurring on the land. have been confirmed. It requires large investments to be made. It creates a large number of jobs and contracting opportunities.

The Construction StageConstruction Stage: the stage in which all facilities, buildings, roads etc. necessary for the operation of a mine are built. generally takes 2-4 years. Costs can range from $100 million up to $3 billion. Ekati and Diavik, two remote diamond mines in the Northwest Territories (see *Case Study #1, p. Intro-10) cost respectively $750 million and $1.3 billion to construct. Smaller mines that are close to highways, electricity, or railroads are likely to have much lower construction costs.12 For example, the Wolverine project in southeast Yukon cost $175.6 million to build.13

Some of the infrastructure necessary to a mine may not be built by private companies. Other parties may build it, especially government.

Acts and Regulations

Permits for excavation, buildings, and for the use of explosives are required from a variety of provincial or territorial agencies. Other necessary permits might include:

• Transmission line permit to construct, operate and maintain an electric power transmission line.
• On-site sewage disposal permit to install a sewage disposal system.

Benefits and Opportunities

As in the two previous stages, construction creates business opportunities in services (transport and catering, for example). There is a now a far greater need for construction trades and services, however. Depending on the mine, a port may be required, or schools, community centres, and recreational facilities. Each will require the work of architects, builders, cabinet-makers, electricians, plumbers, drywallers, and other trades.

Agreements

SEPAs concluded prior to mine construction can enable Aboriginal communities to capture many significant downstreamDownstream: downstream business refer to suppliers of products and services such as exploration, production, processing, product development, technical services, marketing and sales that supply the mine but are not owned by the mine. opportunities during this stage. There may be compensationCompensation: something (such as money) given or received as payment or reparation (as for a service or loss or injury). payments or the construction of community infrastructure. Still more significant at this stage are the business opportunities, and the jobs and training they entail. While brief, the Construction Stage is intense. It provides more job opportunities in any given year during its short duration, than any other stage.

Joint VenturesJoint Venture: commonly, a business to which two or more parties contribute the essential land, capitalCapital: cash, property, equipment, services, and contracts or leases., and services, in return for a share in its ownership and control. (Note: the Joint Venture is very strictly defined under Canadian law.) (see Module 6) are a crucial way for an Aboriginal community to capture some of this abundance of business opportunities.

During the construction of Diavik Diamond Mine (see *Case Study #1, p. Intro-10), employment averaged 800 workers and peaked at about 1,500. Of almost $1.3 billion in construction contracts and contract commitments signed during that stage, about $900 million were with northern businesses. Two-thirds of that amount was with Aboriginal Joint Ventures and other Aboriginal companies.

In their SEPA, Tr’ondëk Hwëch’in (TH) and Loki Gold agreed that TH alone should be allowed to bid on certain contracts. (See *Case Study #3: Brewery Creek Mine, p. Intro-30.) The Loki representatives did not expect that the First Nation would have the capacity to take advantage of this clauseClause: a subdivision (often numbered) of a document, that clarifies, defines, or explains the subject matter. Often called a provisionProvision: an action or item stipulated by an agreement. Often called a clause... They were in for a surprise. Even before the SEPA was signed, TH started negotiating a Joint Venture with Procon Mining and Tunneling and VLB Resources. With these partners, TH was able to win the contract to build an access road to the mine and to construct portions of the leach pad. In turn, TH provided Loki with a quarry permit that enabled the company to haul gravel from interim protected TH Settlement Land.

Note that a SEPA will concern not only the benefits available during the Construction Stage, but during the Operation StageOperation Stage: stage in mining in which the metal or mineralMineral: A naturally-occurring, homogeneous substance that has a definite chemical composition and (usually) a crystalline structure. is extracted from the ground and processed on site or off-site. of the mine as well. Training programs during construction may help prepare Aboriginal people for the job opportunities that arise once production begins.

Most SEPAs are primarily concerned with the business, training, and job opportunities generated by the mine itself. However, there are examples of Aboriginal communities that choose to focus on other priorities.

At Snap Lake, in addition to a SEPA with the Lutsel Ke Dene, DeBeers concluded a SEPA with the Tlicho people. This agreement’s terms focus on the promotion of traditional livelihoods. Instead of serving a small number of members with an interest in wage-paying, industrial work, the SEPA fosters the cultural well-being of the whole Tlicho people.14

Whether or not this approach to a SEPA is appropriate depends on the community’s vision of its future. (See Module 1, “Strategic Issue #1: Vision,” p. 1-10).