Engaging the Locals

View of the Nechalacho Camp across Thor Lake in autumn. Nechalacho is one of the few advanced-stage rare earth projects outside of China.

Avalon Rare Metals has committed itself to sustainability and is now finding win-win solutions through socially responsible mining

In the summer of 2012, First Nations and aboriginal peoples gathered to protest the behaviours of local and national governments in many parts of Canada. The groups, citing insufficient engagement at all levels of government, formed blockades on railroad lines and major throughways, halting mining and construction projects.

But Avalon Rare Metals, a development-stage mineral development company with sustainability and social responsibility built into its DNA, demonstrates that many of these problems can be avoided by engaging with local communities and seeking meaningful partnerships.

The Word on Green

Richard Pratt, vice president, general counsel, and corporate secretary for Avalon, has worked in mining, manufacturing, broadcasting, and technology over the course of his 20-year career. He obtained an Honours BComm from the University of Manitoba and a BL from Dalhousie University. Below, he offers some thoughts on socially conscious mining.

Sustainable Behaviors: “The key idea here is engagement. It’s not just our executives talking to chiefs; we are focused on building real relationships that benefit both parties in real ways.”

Sustainable Education “Mining is a highly valuable activity that we can perform in a sustainable way as long as our leaders, our employees, and our partners all understand the vision we are trying to accomplish.”

Social Responsibility: “This can refer to a compliance culture or a leadership culture. We prefer to be leaders in this area instead of compliers.”

Founded by Donald S. Bubar, the organization is focused on the development of rare earth mineral deposits. Its flagship project is the Nechalacho Rare Earth Element deposit, located in the Northwest Territories.

Rare earth elements are used to form materials that become essential components in high-tech products such as wind turbines, electric and hybrid vehicles, and smartphones. Currently, China controls 95 percent of the world’s supply of rare earth elements and has been using quotas and consolidation of state-owned companies to reduce the amount available for export. Avalon’s Nechalacho project, rich in the more valuable, heavy rare earth elements, is one of the few advanced-stage rare earth projects outside of China.

The project’s feasibility study is expected to be released in the coming months, distinguishing the company from rare earth juniors who are just completing their preliminary economic assessments (PEAs) or prefeasibility studies (PFSs). If all goes according to plan, construction will begin in 2014, and Nechalacho will be in production by late 2016 or early 2017, providing producers of high-tech products with a secure and sustainable supply of rare earth elements.

Avalon, a 30-person company with three offices (in Yellowknife, Vancouver, and Toronto), expects to mine at Thor Lake, Northwest Territories, for 20 years. The work site, which includes the proposed mine at Thor Lake and a hydrometallurgy plant at Pine Point, is home to four communities of the Dene Nation.

Richard Pratt, vice president, general counsel, and corporate secretary for Avalon, says his company is dedicated to sustainability and ensuring that the people of the surrounding communities benefit from the project. “Our president helped create an Aboriginal Affairs Committee with the Prospectors and Developers Association of Canada that fosters communication between companies and communities,” Pratt says. “His focus on aboriginal engagement has affected our leadership culture in all aspects of environmental and social engagement.”

In fact, Avalon’s relationship with its aboriginal partners is central to the Nechalacho project. “It goes both ways,” Pratt says. “We benefit in the exchange of knowledge from them, and they benefit from employment opportunities and shared ownership in the endeavour.” Avalon works with the aboriginal groups to understand environmental and cultural impact as well as wildlife and economic issues. “We’re not just paying royalties and handing out buckets of cash,” Pratt says. “We’re really working together.”

When aboriginal elders tell Avalon executives where local caribou migrate, for example, the company can better plan workflow to minimize its effect on the animals’ migration patterns. Understanding the historic use of lakes in the area helps Avalon extract valuable rare earth and heavy rare earth elements without destroying aboriginal land and tradition.

Last year, Avalon published its first Corporate Sustainability Report, based on Global Reporting Initiative performance indicators, a significant endeavour for a junior mining company.

Richard Pratt
Richard Pratt

These steps, along with Avalon’s positive relationship with its aboriginal partners, have paid dividends. “These policies give us social license to operate and bring great benefits,” Pratt says, adding that Avalon enjoys local support from communities, companies, and contractors.

Avalon’s efforts to engage the aboriginals at Nechalacho earned it PDAC’s 2010 Environmental & Social Responsibility Award. In April 2005, after acquiring the project, Bubar met with chiefs and elders of the Yellowknives Dene First Nation before even applying for a land-use permit. Then Avalon hired workers from local First Nations to clean work sites ruined by previous mining companies, and the company asked the Dene elders to name the project. (Nechalacho translates to “Long Point.”) The Dene then performed a traditional ceremony upon the land. “They have literal ownership in the project and a voice in management and operations,” Pratt says.

Today, Avalon continues to employ aboriginal people and has helped deliver two training programs. Additionally, First Nation communities receive preferential access to bidding on contracts to supply goods and services at Nechalacho. It’s a mutually beneficial arrangement for all parties involved.