Iron-ore mining company Baffinland Iron Mines CEO Brian Penney on Thursday expressed the company’s disappointment at Northern Affairs Minister Dan Vandal’s rejection of the Phase 2 expansion of the Mary River mine, in Nunavut.

His comments followed the federal government’s decision on Wednesday to accept the recommendation of the Nunavut Impact Review Board (NIRB) that the Phase 2 proposal, in its current form, should not proceed, citing potentially significant adverse impacts on vegetation and freshwater, as well as adverse eco-systemic impacts on marine mammals and fish, caribou and other terrestrial wildlife.

Vandal encouraged Baffinland to work with its partners in establishing a positive path forward. “This can be done by Baffinland applying for a new project to adequately consider any new proposed commitments in public setting, providing certainty for all partners,” the Minister said.

However, Penney believed that the Phase 2 proposal was based on years of in-depth study and detailed scientific analysis. “We executed a new Inuit Certainty Agreement with the QIA (setting new standards in the Canadian Mining industry for environmental compliance, benefits, training, royalties and taxes), and we have had extensive consultations with, and made additional (environmental and benefits) commitments to, stakeholders post-release of the NIRB recommendation in May (including mediation with the QIA and the Ministry of Northern Affairs).

“Given the four years of work and the material progress made since May, we are disappointed the Minister did not encourage all parties to promptly settle any outstanding issues and agree on a practical path forward for the project,” he said.

Baffinland said its proposed expansion had widespread support from local communities, HTOs and the International Union of Operating Engineers.

“Baffinland’s Phase 2 expansion plan would have created long-term stability for our business, for the local communities on Baffin Island and for the territory of Nunavut, while lowering the marine and terrestrial effects of our current operations (not increasing them) and increasing the number of jobs from the current level,” said Penney.

“Given the clear benefits to Inuit, Nunavut and Canada as a whole, and the fact that Baffinland high-grade ore is also the greenest path to steel production, the Minister’s decision is both surprising and disappointing.”

The rejection of the expansion will have an impact on 2 500 people employed by the Mary River mine, which is located on the Baffin Island.

The Mary River mine, which is jointly owned by ArcelorMittal and The Energy and Minerals Group, is currently permitted to extract and ship up to six-million tonnes of iron-ore a year.

To ensure the economic viability of the mine, Baffinland is seeking approval to expand its operations to 12-million tonnes a year. The proposed Phase 2 expansion involves building a railway from the Mary River mine site to Milne port, adding a second ore dock and increasing the amount of ore delivered to its customers each year.