Mining company optimistic about N.W.T. proposed power expansion

A company that's trying to revive mining in the Yellowknife area is optimistic about funding for the Taltson hydroelectric system the biggest infrastructure project in the Northwest Territories.

"We're obviously happy to see somebody starting to pay attention to power in the North," said Joe Campbell, the executive chairman of TerraXMinerals.

The company is exploring 776 square kilometres of land in and around the city. It's part of the historic Yellowknife greenstone belt that gave rise to the two gold mines Con and Giant and supported the city for more than 50 years.

Campbell says power is the main infrastructure issue his Yellowknife City GoldProject is facing.

"The present system doesn't meet the requirements of Yellowknife itself, never mind a mining operation."

The territorial government's proposed expansion of the Taltson hydro system, which includes linking it to the hydro system that serves Yellowknife, improves the prospect of turning TerraX's gold project into a mine.

This week, the federal and territorial governments announced $1.2 million in funding for the project.

Though there is no new cost estimate, five years ago the territorial government estimated a similar expansion would cost $1.2 billion.

"We hope that's a slow ramping-up that's going to escalate," said Campbell of the funding announced this week.

Federal Northern Affairs Minister Dominic LeBlanc signalled as much, saying the project was "positive in so many ways." He referred to this week's funding announcement as one step in a long-term journey toward completing the project.

"We want to accompany the Government of the Northwest Territories in expanding this," said LeBlanc.

Communities not on the grid

Though both governments said the expansion would go a long way toward reducing the territory's greenhouse gas emissions, a northern environmental group is concerned it's not going to leave any money for renewable projects for communities that are not on the hydro grid.

"There are lots of opportunities to use that amount of money to help people in communities that are struggling with their energy costs," said Craig Scott, executive director of Ecology North.

"We don't believe this will do that. This is essentially a project that will reduce the costs of future mines, realistically."

Scott pointed to cost overruns into the billions of dollars for other hydro projects, such asMuskrat Falls inNewfoundland and Labrador and Site C in British Columbia, asexamples of how difficult it is for governments to control the costs of mega-hydro projects.

• Nalcor's lowballing is proof Muskrat Falls was never viable, says consumer advocate
• B.C.'s Site C dam project behind schedule, plagued by problems, expert claims

He also said the full expansion is predicated on a business case that has yet to be proven. The first phase would require selling power to mines, something the territorial government attempted and failed to do the last time it proposed the Taltson expansion.

A third phase would involve connecting the northern hydro grid to the southern grid and selling power to the provinces, where power is typically far cheaper than it is in the North.