The companies in charge of Yukon’s three producing mines spent $8 million this year just on flying employees to and from their sites.
The producers presented this week at the Yukon Geoscience Forum.
Ron Light, general manager of Capstone Mining Corp.‘s Minto copper mine, and Brad Thrall, chief operating officer for Alexco Resource Corp.‘s Bellekeno silver mine, spoke to the challenges of people, infrastructure and permitting.
No representative from Yukon Zinc’s Wolverine zinc mine was on hand, but information from that operation was included in the presentation.
Training and attracting more Yukoners could be a big difference, said Light and Thrall.
Forty-eight per cent of Bellekeno operational costs are related to employees, and for Minto that number jumps to 65.
Those “people” costs include not only salaries and travel, but also food and accommodations.
“Long gone are the days of the mining town,” said Thrall.
Today, the model is fly in, fly out.
That’s not necessary because mining companies like that model, he said.
For employees, there are many benefits, like having accommodations costs covered and being able to live anywhere. And if the mine shuts down, transitioning to a new job is easier, said Thrall.
But for the companies, flying people in can be very expensive, and the two-week in, two-week routine out can cause problems with continuity, he said.
The companies would love to have more Yukon employees, and the barrier to that is training.
The federal government recently committed $5.6 million to Yukon College’s Centre for Northern Innovation in Mining. The Yukon government has committed $11.4 million.
That centre hopes to bring training into Yukon communities that would meet the skills most in demand in the mines.
“We don’t want to train (Yukoners) to be janitors, we want to train them to be tradespeople, miners, where they make a good living and they can take that back to the community when the mines are gone.”
A second challenge for Yukon mining companies is the cost of infrastructure. A big part of that is power.
Energy accounts for 10 per cent of Bellekeno’s costs, and 13 per cent of Minto’s.
At Wolverine, which is off the power grid, that cost jumps to 15 per cent.
Both Light and Thrall mentioned that they are interested in looking at liquefied natural gas as a way to cut spending on power.
“I heard some good things this morning about LNG and certainly we are looking at LNG,” said Light. “I don’t know to what degree we would go with it, but I think there is a big cost savings there.”
Light also mentioned a proposed increase in fees for overweight trucks, from one cent per tonne per kilometre to four. That would mean an additional cost of $200,000 per year for the company, he said.
“That’s hard to put into your budget. I don’t mind incremental increases, but a big increase like that really hurts. So that’s a challenge for us.”
Permitting is another challenge for the mining industry, said Thrall and Light.
To get a mine into operation, a company first has to go through a review by the Yukon Environmental and Socio-economic Assessment Board, and applications for a quartz mining licence and a water licence.
“It’s different review bodies reviewing the same thing. It’s onerous and it’s complicated and it’s hard on companies that are trying to operate.
“We spend time and resources doing things to be compliant, not because they’re necessary to protect the environment. So we spend a lot of time spinning our wheels.”
Since 2006, Alexco has been through YESAB eight times, with a total of 36 months in that assessment process, said Thrall. The company is about to make another application, he said.
The problem is that operating conditions are not the same when you start the process as when you finish it, and the process doesn’t allow for flexibility when plans change, he said.
The companies have ideas about how the process could be improved to make it more efficient while still protecting the environment and respecting First Nations, they said.
Reviews of the Quartz Mining Act and the Waters Act are currently underway, and that could work to solve some of the issues of overlapping jurisdiction.
Contact Jacqueline Ronson at