PDAC 2016: Mining downturn poses enormous threat to NWT, premier says

When De Beers halted its Snap Lake mine in the Northwest Territories in December and laid off 600 people, it sent some shockwaves through the region. It was no secret that the mine had major problems, but De Beers spent so much money on it that a lot of people didn’t think the company would actually give up.

“It was always in the back of our mind (that De Beers could walk away),” Premier Bob McLeod said in an interview.

The Snap Lake closure was a wake-up call for the NWT, where mining makes up 40 to 50 per cent of the economy. The NWT has been one of Canada’s fastest-growing economies for years, but shuttering Snap Lake is having an impact.

“If we don’t have mining, we’re back to government being the biggest part of our economy,” McLeod said. “Not what we want.”

In the short term, he is concerned that three promising mining projects (Nechalacho, NICO and Prairie Creek) are stalled because of a lack of capital. He is also frustrated that the NWT continues to score relatively poorly in the Fraser Institute’s rankings of mining jurisdictions (it came 35th in the latest rankings). He thinks those rankings are skewed by people who haven’t worked in the territory in decades and aren’t aware of the improvements in the overall investment environment.