Nunavut Inuit group shows its members the mining money

The Inuit land-claim organization for Nunavut's Baffin Island region is taking the lid off a traditionally hush-hush topic: how much money an aboriginal group receives in its financial deal with a mining company.

The Qikiqtani Inuit Association (QIA) Board of Directors released a version of its Inuit impact and benefit agreement (IBA) with Baffinland Iron Mines Friday that includes dollar figures for how much has been promised to the QIA. 

"I was somewhat taken aback," said Doug Paget, a retired consultant in Ottawa who has tracked such agreements for years, via email. "This is, I think, the first time that this has happened."

Article 5 of the QIA's agreement spells it all out:

The benefits include an advance payment of $5 million and another $5 million after Baffinland received its water licence.

Belief in 'transparency'

"The board strongly believes in transparency between QIA and all of the beneficiaries," said P.J. Akeeagok, the president of the QIA, in a media release.

"It is crucial for beneficiaries to have access to information from their organization to be well informed."

Paget says the large geographical area covered by the agreement might have also prompted the QIA's reveal.

"Unlike most IBAs which are usually (but not always) signed on behalf of a relatively small population in a small physical area, this agreement was signed on behalf of Inuit living in [several] communities on all of Baffin Island," he said. 

"Thus dissemination of the agreement would be more difficult and along with the transparency mentioned in the press release, this process enabled the QIA to reach all of its constituents." 

Impact and benefit agreements are typically signed between mining companies and aboriginal groups or communities affected by a development.

While the general provisions of those agreements — job training, scholarships and royalties — are well-known, the exact amount of those payments, or the rates that determine them, have long remained confidential.

1.19% royalty on net iron ore sales

So what perks from Baffinland Iron Mines' Mary River project does Article 5, "Financial Participation", provide for the QIA?

Here's the breakdown:

• an advance payment to the QIA of $5 million on the signing of the impact benefit agreement. The deal was signed September 2013.
• $5 million after Baffinland received its water licence
• another $10 million to the QIA after Baffinland began building the mine's infrastructure in the second quarter of 2013
• a 1.19-per-cent royalty on Baffinland's net sales of iron ore

The royalties aren't flowing yet to the QIA, however, and won't until Baffinland begins producing iron ore at 60 per cent of the mine's production capacity.

The company shipped its first batch of iron ore last August to customers in Germany.

Baffinland is expected in September to file its environmental impact statement for a plan to significantly increase the amount of iron ore it can ship out per year.