Questions and Answers | Resources and Energy Development Information

Minerals

The NWT is rich with gold, diamonds, precious metals and more. The following set of questions will help you answer why minerals are important to the NWT and how they contribute to everyday life.

What kind of minerals does the NWT have?

The NWT has many valuable minerals yielding rich resources such as:

Diamonds
Precious metals: gold, silver, platinum
Base metals: zinc, copper, lead, nickel, iron
Tungsten
Uranium
Cobalt, lithium and bismuth
Rare earth elements: neodymium, europium, terbium, dysprosium and yttrium, lanthanum and cerium
Coal

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How many operating mines are in the NWT?

Currently, there are three operating diamond mines in the NWT:

Ekati Diamond Mine, Canada’s first diamond mine, opened in 1998.
Diavik Diamond Mine, opened in 2003.
Gahcho Kué Mine, opened 2016.

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How does the Government of the Northwest Territories make money from mining?

The government collects money from mining in two main ways: taxes and royalties.

Taxes

Over the past three years (2015-16 to 2017-18), diamond mines have contributed 44 percent of the GNWT’s tax revenue. These revenues come in the form of:

Corporate taxes - A percentage of money taken from profits of companies doing business in the NWT. Currently, the corporate tax rate is 11.5% of corporate taxable income.
Property taxes - Mines in the NWT are charged taxes for the properties they hold.
Fuel taxes – Mines sites that are continually running power generation facilities, haul trucks and processing equipment, burn a lot of fuel. The NWT applies taxes on all fuels used for purposes other than heating.
Payroll taxes – Everybody who works in the NWT is charged a 2% tax on their employment incomes (NWT residents receive a refundable Cost of Living tax credit.)

Royalties

Royalties serve to convert the resources in the ground into a financial asset. The amount of royalties collected varies depending on how well mines do.

Royalties are calculated on both production value and projected profits. This means that what companies pay for NWT resources is based on both the amount of money their resources generate each year, and how profitable those resources have been.

Production value can be influenced by things like market prices and the quality of resources being extracted. Profits are influenced by how much is produced at a mine, and how much the company needs to spend to produce those resources.

The higher the production and profit, the more the NWT collects in royalties

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How much does the government collect from mining royalties?

The payment of royalties is regulated by the Northwest Territories Mining Regulations and the amount of royalties collected varies depending on how well the mines do. Since, 2008-2009, the GNWT has collected an average of $71.26 million annually. Resource revenues in 2017-18 were $66 million and most were diamond royalties.

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What is prospecting?

Prospecting is the act of looking for signs of a valuable natural resource deposit that could one day be mined for a profit. It is most often used to describe the work of exploring for minerals, metals, or precious stones. It is also known as “mineral exploration.”

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Do you need a licence to go out prospecting?

No, you don’t need a prospecting licence for amateur level prospecting within open territorial lands in the Northwest Territories. You are not permitted to remove minerals (pick up rocks) situated within the boundary of a recorded claim or mineral lease without the knowledge or consent of the claim or lease holder.

However, a License to Prospect grants the right to prospect for minerals on all public lands in the Northwest Territories that have not been withdrawn from staking for any reason.

Only a license holder can submit a Mineral Claim or register for a prospecting permit. A prospector’s license costs $5 for an individual over the age of 18 and $50 for a company, and must be renewed every year.

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What is a prospecting permit?

A Prospecting Permit will allow you to prospect in an area covered by the permit, without competition for a period of three or five years. Prospecting Permits held south of 68°N have a term of three years, while permits held north of 68°N have a term of five years. The area covered by a Prospecting Permit can vary in size from 8,319 to 22,900 hectares. Permits are not renewable and must be converted to mineral claims before the permit expires, provided the work requirements are completed. The application fee for a prospecting permit is $25.

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What is a Mineral Claim?

A Mineral Claim provides the exclusive right to an explorer to search a particular area for minerals under the ground. This does not, however, give the explorers the sole right to the surface area of that land. A Mineral Claim also does not give the explorer the right to develop the land for commercial production.

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How do you stake a Mineral Claim?

A Mineral Claim must be physically staked by marking the corners and the boundaries with posts (stakes). The application to record a claim must then be submitted to the Mining Recorder’s Office in the Northwest Territories, along with a registration fee. If the requirements have been met while staking the claim, the Mining Recorder will record the claim as soon as practicable after the 60th day following the day on which the staking was completed.

Claims are limited in size. To maintain the Mineral Claim, exploration work must be completed and renewal fees must be paid on an annual basis, dependent on the size of the claim.

Anyone with a prospector’s licence can stake a claim – or have a claim staked for them – on all public lands in the Northwest Territories that have not been withdrawn from staking for any reason.

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What is a Mineral Lease?

A Mineral Lease is meant to be the “next step” for mineral exploration and cannot be obtained without the work requirements of a Mineral Claim being met. A Mineral Lease allows land to be developed for commercial production. A Mineral Lease is required if you intend to sell or otherwise dispose of minerals with a total value in excess of $100,000 in one year. To maintain a Mineral Lease, an annual rent must be paid to the Government of the Northwest Territories.

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Someone staked a claim in my area. How long before it becomes a mine?

Not all mineral claims turn into mines. After a mineral claim is staked and the discovery is made, further study must be done to shed light on whether or not building a mine is a viable option. In order to advance, a project must be supported by many different facets, and if even one of these show weakness, it is enough to end the project. Some of the facets that need to be considered include:

Size, depth and complexity of the ore body;
Market value of the commodity to be mined;
Access to roads and power;
Cost to build and operate the mine;
Time required to get permits and licences;
How much money can be raised from investors.

This information is gathered through further exploration of the mineral claim, engineering studies, pre-feasibility and feasibility studies, environmental assessments, licencing and permitting. If a mining company is able to navigate this process with positive results, the project will proceed. This process could take 10 to 20 years.

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Do mining companies have to talk to communities before a mine is built?

Mineral exploration companies are encouraged to engage with communities at the early stages of exploration. However, companies that are looking to conduct more detailed exploration and eventually mining, are required to consult with communities and Indigenous governments and organizations.

This may involve written notification of proposed activities, meetings with the affected party (either over the phone or face-to-face), community public meetings, or even workshops conducted in the community.

The level of communication required is highly dependent on the size, scale, nature and stage of the project. In general, as a project advances, and potential impacts increase, more communication will be required with the surrounding communities.

Regardless of the communication approach, the goal is information sharing, between all parties involved in a project – communities, companies, and governments.

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What is the Mineral Resources Act?

The Mineral Resources Act (MRA) is a set of laws – known as legislation – proposed as a Bill by the Minister of Industry, Tourism and Investment Wally Schumann in early-2019.

If passed, it will guide a great deal of the way mining and mineral exploration and production in the NWT will happen, and how these should benefit the Northwest Territories. It is currently being considered by Members of the Legislative Assembly of the Northwest Territories.

For details, check out the Department of Industry, Tourism and Investment’s guide to understanding the proposed legislation here.

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Who is responsible for ensuring mining companies follow the rules?

Several different groups work together in what is known as a “Co-Management System”, to represent a wide-range of different perspectives. These groups are responsible for assessing, licensing, regulating and inspecting petroleum and mineral developments throughout the NWT to ensure natural resource projects follow the laws in-place to allow for sustainable development.

The Co-Management System includes:

The Government of the Northwest Territories
Regional Land and Water Boards
Mackenzie Valley Environmental Impact Review Board
The Government of Canada

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What is Co-management?

Co-management is a system that recognizes the traditional knowledge of residents and gives them the right to participate in decision making. In terms of our resource and regulatory Boards, co-management is a system of resource management that considers environmental, economic, and social concerns from Aboriginal, territorial, and federal levels of government.

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What is the Mackenzie Valley Resource Management Act?

This is a binding set of regulations that establishes regional land and water boards and an independent environmental impact review board. These boards work to ensure the rules are applied consistently and a variety of perspectives, including those of Indigenous groups with settled land claims, are considered during the planning stage of a project.

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What role do the Regional Land and Water Boards play in resource development?

The Regional Land and Water Boards regulate the use of land and water, and deposit of waste through the issuance of land use permits and water licences. These are impartial, independent boards that evaluate projects throughout the entire regulatory process — from proposal to cleanup – considering traditional knowledge and scientific information to make informed decisions.

The four Regional Land and Water Boards in the NWT are:

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What role does the Mackenzie Valley Environmental Impact Review Board (MVEIRB) play in resource development?

The MVEIRB is an independent, impartial board, who is responsible for conducting fair and timely environmental assessments in the Mackenzie Valley.

Occasionally, an environmental assessment is required before a Land Use Permit or Water Licence can be issued by the regional land and water boards. This happens when a proposed development may cause significant adverse environmental impacts or public concern.

The purpose of an environmental assessment is to evaluate proposed developments to protect the environment, including the social, economic and cultural well-being of its residents. Based upon the findings of the MVEIRB, the proposed development will be approved, be rejected, or be required to implement measures recommended as a result of the environmental assessment to avoid or reduce any impacts.

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