This report by ecological economist Tom Green for the Innu Nation and was submitted to the Voisey's Bay Nickel Mine environmental assessment review in 1998. It is a thoughtful consideration of the limitations of mining projects potential contributions to sustainable development and continues to be highly relevant.
Executive Summary
This report was prepared at the request of Innu Nation to examine the economic implications of the proposed Voisey’s Bay Mine and Mill in preparation for the environmental assessment hearings into the undertaking.
The environmental assessment panel has made it clear that it sees environmental assessment as a means of bringing society closer to sustainability. This report closely examines the literature on economics and sustainability in the context of mining. It is focused on when and how the proposed mine should proceed, in conjunction with other related initiatives, in order to make the mine more compatible with sustainable development. This report shows that the Voisey’s Bay mine could be developed later and in a way very different from that proposed by the proponent, in order to be more consistent with the objectives of sustainable development and to provide more modest but longer-lasting economic benefits.
This study comes to the following conclusions:
Sustainable Development
- The Undertaking as presently proposed cannot be found to promote sustainable development.
- Substantial modifications to the project are essential to reconcile the mine with the requirements of sustainability.
- The Undertaking should not proceed until there is demonstrated need, and the pace and scale of the operation should be much reduced.
- Sustainable development requires effective participation by local populations, and in particular indigenous people, in decision-making and in equitable sharing of benefits. The consent of the Innu Nation and of the LIA should be obtained before the project proceeds.
Need
- There is no need for the Undertaking within the next 7 to 10 years.
- Alternatives to the project exist but have not been thoroughly considered.
- Proceeding with the project at the present time could well impose social costs on other nickel mining regions in Canada.
Pace, Scale, and Timing
- The project is viable at a much reduced pace of operation of approximately 5,000 tonnes per day, vs. the 20,000 tonnes per day proposed by the Proponent.
- The project would still be viable if it were deferred by 7 to 10 years.
Economic Benefits
- The economic benefits of the project have been overstated by the Proponent. Once subsidies and costs imposed on government by the Proponent are deducted, and government revenue is adjusted to take into account the “user cost”, the level of economic benefits appears more modest.
- By reducing the scale of the project and delaying start-up to provide an opportunity to build local capacity to participate in the project and to manage the changes induced by the project, prospects for local economic development are likely to be enhanced.
- The project may have the potential to leave a long-lasting economic burden through social disruption and potential for environmental contamination, in which case overall economic benefit would be much reduced.
- The Undertaking as currently designed is unlikely to significantly contribute to local economic diversification.
- By setting aside the user cost in a Sustainable Economy and Diversification Fund, the benefits from mining can be shared between generations to the lasting benefit of Labrador’s aboriginal and non-aboriginal population.