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Arctic Business Journal Briefings offer readers summary and analysis of current issues and trends, key firms and coming events, as well as links to further reading and resources.
Natural resources

For a world running out of sand, Greenland is pay dirt

September 06, 2022

But as with all the other resources Greenland could be supplying the world, cost is an object

But as with all the other resources Greenland could be supplying the world, cost is an object

Worth its weight in subsidies (📸: Nikolaj Krogh Larsen / KU)

Key findings
■ Sand is commonplace, but not all sand is suitable for building
■ Meltwater from Greenland’s icecap deposits lots of the type of sand builders need along its coasts
■ Greenland’s potential sand exports could amount to half of its current GDP and four times its annual subsidy from Copenhagen
■ Despite the uncertainties about sand harvesting, it appears less divisive than other forms of natural-resource extraction


Sand, gravel and stone are the world’s largest group of natural resources. Due to global urbanisation and generally increasing economic prosperity, the demand for these raw materials of urban development and infrastructure is increasing rapidly. That is good news for the countries that have the right sorts of them. Between 2017 and 2021, global exports of sand, for example, rose 10.5%, and are now valued at €1.7 billion.

Greenland has considerable amounts of the sort of gravel and sand (pointy and sharp, which helps grains to bond together, making it better for things like cement and mortar) that builders want. Some of this is in the form of rock that can be processed mechanically, but what entrepreneurial sorts have their eye on is the huge amounts of sand and gravel that has been crushed by natural forces and gets washed down to the coast with meltwater from the ice sheet.

Were all of the sand deposited along Greenland’s coasts to be collected and sold abroad, it could bring in some €2 billion a year, or more than half of the value of its current economic activity, and four times the annual subsidy it gets from Copenhagen. And that without taking into account the increasing volume of sand that is being washed out as global warming drives faster melting of the ice sheet. Nor does it take into account a projected doubling of the cost of sand over the next 25 years as supplies dry up.

Greenland already harvests limited amounts of sand for its local building projects. And, in 2020, the Self-Rule Authority commissioned a study into whether it would be possible to scale up harvesting and to export sand to Europe and North America. The study found that this was indeed feasible and technologically within Greenland’s reach, but it had a caveat for anyone interested trying to make money off doing so: sand is a low-cost product with a slim profit margin. Although harvesting sand from the coastline would be a relatively simple operation, getting it to market would be costly, making it a viable industry only if the sand could command a high enough price.

As things stand right now, Greenland’s sand is no gold mine, and it is hard to say whether it ever could be, even with growing demand and concerns that supply can keep up. The study suggests that, yes, because of the make-up of its sand, there is plenty of potential, but that, it in order for an operation to be profitable, the sand must be located in easy-to-reach places. It must be also piled up high enough, which rules out newish formations caused by recent global warming, though the fact that these formations will continue to grow will ensure a long-term supply if harvesting ever does get off the ground.

Other studies have also warned that there may be environmental and social costs of sand mining, and that this needs to be looked into more closely before operations are allowed to begin. As far as the latter goes, there appears to be broader popular support for expanded extraction and export: a survey, published in August, found three-quarters of those interviewed were in favour, making it much less divisive type of mining activity than other proposed projects.

“Global warming traditionally brings with it a myriad of challenges for the Arctic people, but here, for once, we see an opportunity to use the changes to one’s advantage,” Aart Kroon, an associate professor at the University of Copenhagen and a co-author of a paper based on the survey, said. Never was there such optimism about an an economy built on sand.

Further reading
Greenland’s Indigenous population favours extracting and exporting sand from melting ice sheet
McGill University
Greenland’s Melting Glaciers Spew a Complicated Treasure: Sand
Wired
Even desert city Dubai imports its sand. This is why
BBC
Greenland: Build an economy on sand
Science
Promises and perils of sand exploitation in Greenland
Nature Sustainability

Resources
The PROGLAKE Project

Can coastal changes in Greenland create prosperity locally (video recorded 3 June 2019)


Arctic Business Journal Briefings offer readers summary and analysis of current issues and trends, key firms and coming events. Articles include links to further reading and external resources to give readers a place to begin their due diligence. 

As a way to encourage discussion about topics, briefings will also seek to include opinionated commentary submitted by outside writers.

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Strategic minerals

Chinese companies in Arctic mining are gaming the master plan — but Western needs often drive Chinese involvement

September 01, 2022

Looking for Chinese state ownership in Arctic extractive projects misses the point, and politically framed rhetoric from Chinese companies may be misleading. Some Western companies downplay their Chinese relations, but Western companies are often reliant on Chinese partners.

Looking for Chinese state ownership in Arctic extractive projects misses the point, and politically framed rhetoric from Chinese companies may be misleading. Some Western companies downplay their Chinese relations, but Western companies are often reliant on Chinese partners.

(📸: Hudson Resources)

Patrik Andersson, Per Kalvig & Ulrik Pram Gad


Key findings
■ Rather than directing specific investments, the CCP prefers to design policies that encourage companies to contribute to state objectives.
■ The main incentives are generated by domestic development ambitions, but companies enlist geopolitical objectives as arguments for marginal projects.
■ Both geopolitical arguments and standard Chinese political rhetoric easily backfire when translated to Western audiences.
■ Western project developers’ need to demonstrate a way into supply chains monopolised
by China often acts as an important driver for Chinese involvement


In Western media, Chinese companies are sometimes discussed as being parts of a well-oiled state machine. They are not, but neither are they left to fight on their own without any support or guidance. Rather, they follow their own business priorities while eagerly seizing opportunities provided through supportive state policy. Interaction and integration with the state varies between different types of companies. The Chinese Communist Party (CCP) has a complex set of levers which make it possible to secure specific strategic investments. The likelihood of state intervention varies depending on the commodity involved as well as geopolitical factors. However, the preferred mode of governance is to issue general policies that encourage companies to contribute to state objectives.

The main incentives are generated by the domestic development ambitions as laid out in five-year plans, trickling down from the general level to the sector-specific level. For instance, China has an industrial policy for developing so-called “strategic emerging industries” — a set of nine high-tech industries deemed crucial for driving economic growth and investment in the future. Advanced rare earth materials and products have been identified as crucial for developing several of these industries. At the same time, the Chinese government has categorised rare earths as not just “strategic minerals” but also as “advantageous minerals” due to the de facto Chinese monopoly. Mining and processing are therefore regulated by a quota system to which only four large state-owned enterprises have access.

This regulation has incentivised some Chinese companies to bypass the quota system by securing rare-earth resources overseas through partnerships with Western miners. From a central-planning perspective, this has facilitated the outsourcing of the upper parts of the supply chain. This is a way of conserving domestic reserves and moving some of the pollution of rare-earth mining overseas while ensuring that Chinese industry gets the rare-earth resources it needs. Western miners continue to rely on Chinese facilities and expertise for downstream processing of rare earths and manufactured goods embedded with rare-earth elements, such as permanent magnets. However, the very labelling of the commodity as “strategic” presents a chance for Chinese companies seeking rare earths abroad to argue that their projects contribute to state goals.

Playing the language game when competing for support
The “go global” policy, launched in the late 1990s, served to encourage companies to invest overseas. However, tighter control over capital outflows means that companies and government agencies now compete over increasingly scarce state funding. Presenting a solid business case has become increasingly important following a series of wasteful investments during the mining “super cycle” years from 2006 to 2013, but companies also try to show how they deliver on different policy agendas. Political language informs companies of state priorities and provides them with opportunities for framing.

Chinese mining companies have in the past oriented themselves first and foremost on the basis of China’s industrial-development priorities and the demand for different minerals and raw materials. However, framing can be tailored strategically to target other sector policies. In the past decade, the Arctic has become part of major Chinese foreign policy initiatives. The Arctic is now part of the Belt and Road Initiative (BRI) in the form of a “Polar Silk Road”. Becoming a “polar great power” is one component of the broader goal of becoming a “maritime great power”. The Chinese state also classifies the polar regions as one of its “strategic new frontiers” (together with the deep sea, outer space and cyberspace). These are spaces where great powers compete over resources and geopolitical influence, where sovereignty is often contested or ambiguous, and where China seeks to (re)shape global rules and standards. All these initiatives have been accompanied by an increase in state funding.


Investments by Shenghe Resources
The Chinese company Shenghe Resources has invested in the Kuannersuit / Kvanefjeld rare-earth project in Greenland.

In Chinese-language external communication, Shenghe labels itself a “practitioner” of the BRI. Shenghe’s largest shareholder, a sub-unit of China Geological Survey, has framed its overseas engagement as both a contribution to the BRI and as serving the company’s development needs.

In annual reports, Shenghe has stressed that rare earths and the rare-earth sector are classified as “strategic” by the Chinese state. The company has also framed its activities as supporting Chinese industrial objectives, such as the “strategic emerging industries” development plan.

Likewise, Shenghe embraced “Made in China 2025” in its annual reports — until the CCP instructed companies not to mention the strategy because of its negative reception in the West.


Investments in each part of the world come with their own set of political and economic risks. However, state support is arguably especially important for Arctic projects because of the unique logistical, environmental, and technical challenges these projects present. The emergence of the BRI has opened possibilities for companies seeking support for investment in marginal projects in regions deemed strategically important. In parallel, some mining companies seek to hook up with priorities signalled by the inclusion of the Arctic in this and other foreign-policy initiatives.

Chinese investors may enrol foreign policy priorities as arguments for engagement. But forgetting about the differences between Western and Chinese priorities in the minerals sector can lead to an oversimplified understanding of their motives. Some of those who raised concerns over Shandong Gold’s bid to acquire a gold mine in the Canadian Arctic read the project as an attempt by the Chinese state to gain a foothold in the Arctic for its Polar Silk Road. However, the Chinese state categorises gold as a “strategic” resource, in contrast to Western ideas of this commodity. This suggests that incentives generated by state interest in the resource itself may have played an important role for the company as well.

Framing backfires, but supply chains remain
The self-promotion by Chinese companies as carrying out state objectives seems, however, to be backfiring on several levels. It may cause the Chinese approach in the Arctic and elsewhere to appear more coordinated than it actually is. For example, during the 2019 Arctic Council ministerial meeting, Mike Pompeo, the US secretary of state at the time, portrayed all Chinese activities — whether state or non-state, civilian or military — as forming part of a co-ordinated approach in the region. This alarming reception is causing Western states to initiate security screenings of foreign direct investments in critical infrastructure which are often necessary but might also hamper the prospects of projects when funding and technology is unavailable elsewhere.

Moreover, Chinese companies’ desire to reap the benefits of overseas investments has dovetailed with Western firms’ need to pitch to investors how they have access to Chinese-controlled supply chains. However, the increasingly strained relations between China and the West make advertising Chinese partners problematic. And threats in Chinese state media of China weaponising its control over supply chains of rare earths and other strategic minerals — something which it has been accused of doing in the past — have further strained the value of Chinese involvement. As a result, some companies seem to downplay Chinese involvement in their projects, while others promote themselves as part of or potential contributors to “China-free” supply chains, even if such supply chains are not realistic in the short term.

On the one hand, leaders in Beijing are aware of how the country’s foreign-policy strategies and industrial policies are portrayed in the West and have taken steps to reshape the narrative. They have, for instance, asked companies to stop referring to Made in China 2025. They also insist that the Belt and Road project be referred to as an “initiative” rather than a “strategy”, because the word “strategy” implies a co-ordinated and ordered plan of action and is thus more likely to raise concern in Western countries. On the other hand, under the tightened rule of Xi Jinping, China’s president, the companies might feel an increased need to justify their activities in relation to official priorities and ambitions, not only to enhance their chances of state support, but also to avoid state clampdowns. And to the degree that such rhetoric and self-labelling amounts to more than paying lip service, Chinese companies will — not always, and not everywhere, but increasingly — contribute to state priorities, even if not explicitly directed to do so.

Rhetoric aside, Chinese technologies and supply networks are still globally dominant, and Western firms’ need to secure access to these supply chains remains a key driver behind Chinese involvement in projects. Mine ownership in itself has little significance for where the raw materials go to be processed. Industry demand and supply security hinge more on highly processed materials and advanced products than bulk raw materials. Security screenings focus on the geopolitical risks of allowing Chinese state or semi-state actors to take over mines in sensitive regions such as the Arctic. But from a supply security perspective, Chinese ownership of mines possibly under the CCP’s guiding hand is less important than control over downstream processing and manufacturing.

Patrik Andersson is a researcher with Diis
Per Kalvig is a senior analyst emeritus with Geus
Ulrik Pram Gad is a senior researcher with Diis

Further reading
Does China control Arctic mineral raw materials?
Diis
Northern mines could provide most of the EU’s strategic metals
Arctic Today
Chinese Mining in Greenland: Arctic Access or Access to Minerals?
Arctic Yearbook

Resources
2022 Final List of Critical Minerals
US Geological Survey
FACT SHEET: Securing a Made in America Supply Chain for Critical Minerals
The White House
Chinese involvement in the Arctic minerals sector (video recorded 23 May 2022)
Diis


Arctic Business Journal Briefings offer readers summary and analysis of current issues and trends, key firms and coming events. Articles include links to further reading and external resources to give readers a place to begin their due diligence. 

As a way to encourage discussion about topics, briefings will also seek to include opinionated commentary submitted by outside writers.

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Continued strong development of startups in Norrbotten and Västerbotten

February 08, 2022

Jens Lundström, CEO of Arctic Business (Photo: Viveka Österman) Startups fostered by Sweden’s Arctic Business generated 52 million kroner in tax revenues for Norrbotten and Västerbotten counties in 2020, an increase of 7 million kronor from the previous year. The companies is valued at more than 2 billion kronor and now…

Jens Lundström, CEO of Arctic Business. Photo: Viveka Österman.
Jens Lundström, CEO of Arctic Business (Photo: Viveka Österman)

Startups fostered by Sweden’s Arctic Business generated 52 million kroner in tax revenues for Norrbotten and Västerbotten counties in 2020, an increase of 7 million kronor from the previous year. The companies is valued at more than 2 billion kronor and now employs more than 370 people full time, according to its 2021 annual report.

“We are proud of the figures, Covid-19 has characterized the last few years and we are a small team of just over ten people working with this to build, support and expand tech startups from northern Sweden,” says Jens Lundström, CEO of Arctic Business.

In 2021, Arctic Business Incubator AB had sales of 18 million kronor in financing from Vinnova, owners and various projects. During the year, the employees, who are located at the respective science park in Luleå, Piteå and Skellefteå, met over 130 business ideas from Norrbotten, Västerbotten, southern parts of the country and the rest of the world. Over 50 teams received help to develop their idea in Arctic Business Accelerator  to be able to decide whether or not to start a company.

During the year, 30 startup companies received more extensive support in the Arctic Business Incubator. Everyone got help with business, team building and financing. In total in 2021, Arctic Business attracted 48 million kronor in financing to its startups.

“These are companies that solve important global problems with technological innovation in areas such as energy, space and mining,” Mr Lundström says.

In 2022, Arctic Business believes in more ideas in the wake of the investments taking place in Norrbotten and Västerbotten. There has already been a sharp increase in interest from entrepreneurs and investors nationally and internationally who want to come to northern Sweden. In 2021, about a third of all contractors contacted Arctic Business from other parts of Sweden or the world.

“It can, for example, be about spin-off ideas from the industries that are now establishing themselves or expanding. Many skilled entrepreneurs will be needed to drive the green transition and we are here to support them,” Mr Lundström says.

Arctic Business Incubator AB in figures 2020
Since Arctic Business was founded in 2005, more than a thousand ideas and teams have received support and advice. To date, 170 limited companies have been created, and 130 of the companies are currently active (with income and employees) and valued at more than 2 billion kronor. Over the years, around 10 companies have been acquired or merged. The remaining 30 have little or no income or have been wound up.

Municipal tax revenues total:
SEK 52m
(of which Luleå SEK 16m and Skellefteå SEK 8.9m)
VAT: SEK 107m
Employed (full-time): 370+
Employer contributions: SEK 41+m
Revenues: > SEK 450m

*All figures are based on annual reports for 2020 that could be compiled in 2021 as they became public.


About Arctic Business

Arctic Business helps entrepreneurs develop extraordinary ideas with growing business nationally and internationally from northern Sweden. Since 2005, Arctic Business has worked with over 170 companies, which today are valued at over 2 billion kronor. We have staff in Luleå, Piteå and Skellefteå at each science park. The business is owned by LTU Holding,

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Matorka – Land Ho! The Future of Sustainable Seafood

October 09, 2021

When it comes to sustainable fisheries, the list of countries that have managed their stocks as well as Iceland is short. In the 1970s, Iceland figured out that to prevent the collapse of its cod fisheries—and the basis of its economy—its fishing future required strict management. To this day, Iceland continues to manage a wide…

When it comes to sustainable fisheries, the list of countries that have managed their stocks as well as Iceland is short. In the 1970s, Iceland figured out that to prevent the collapse of its cod fisheries—and the basis of its economy—its fishing future required strict management.

To this day, Iceland continues to manage a wide range of fish stocks found in its waters through stringent monitoring and science-based catch quotas. Organizations such as Iceland Responsible Fisheries Management (IRFM) ensure the future of Icelandic fishing through a certification chain that guarantees suppliers that the fish originates from IRFM certified fisheries. Additionally, fish processors and other stakeholders constantly look for approaches to use 100% of each fish for food, pharmaceuticals, nutrition, and other supplements. What was not predicted in the 1970s was the role of land-based aquaculture in Iceland’s push for even more sustainable fishing.

Land-based fish farming has been practiced for thousands of years around the world. Icelandic company Matorka has transformed the process into the 21st century using renewable energy, thoughtful designs, and high-tech monitoring systems. Matorka is a clever combination of the Icelandic words “mat,” which means food, and “orka,” which means energy—food energy. The name is suitable. The company is transforming Iceland’s geothermal energy and abundant clean water into the perfect habitat to grow fish.

Founded in 2010, Matorka’s mission is to produce Aquaculture Stewardship Council (ASC) and global Good Aquaculture Practice (GAP) certified premium Arctic char and steelhead. From egg to final harvest, the company monitors and controls all steps of a fish’s lifecycle. Since the fish grow in land-based tanks, the water temperature and oxygenation can be optimally kept. Unlike sea-based aquaculture, the waters are free of parasites and pathogens.

Best of all, the fish need no antibiotics, chemicals, or hormones, and their feed is all-natural and sustainable.

Matorka is understandably proud of maintaining a 1:1.2 Feed Conversion Ratio (FCR) for their fish. This means, on average, it takes 1 unit of mass of feed (dry material) for an animal to gain 1.2 units of mass of live weight. To provide a reference, the average FCR for beef cattle is 6:1 and 2.8:1 for poultry.

While land-based aquaculture currently represents a mere fraction of wild-caught fish, the process and technologies are evolving rapidly with tremendous potential to scale up operations. Matorka now harvests about 1,500 metric tons of Arctic charr and steelhead per year and aims to quadruple its capacity. Large-scale land-based aquaculture in Iceland is particularly attractive because it has plentiful water and renewable power to offset the industry’s energy intensiveness. Matorka has implemented several design elements to increase efficiency that would work anywhere. The entire facility is built on a modular concept. Each module consists of a raceway at the top with three grow-out tanks. The tanks are stacked with 1.2 meters (4 ft) between each so that the water is gravity-fed between them. Because the system is land-based, the entire process of producing fish is more environmentally sensitive. Ocean-based aquaculture systems cannot guarantee that fish will not escape and crossbreed or pass on a disease to native species.

Furthermore, these companies do not consider the tremendous amounts of fish waste that collects in the fjords and bays. Even though the waste dissipates, it can pollute the ocean floors long-term. To produce the highest quality fish, Matorka must account for these factors and have created a cleaner environment than any ocean today through constant filtration and monitoring. Taking it one step further, Matorka offsets any added carbon emissions from their facility by planting trees in Iceland.

While many species are difficult to grow in land-based tanks—such as cod, Matorka’s facility represents the best bet for the most sustainable fish consumption. The company is constantly seeking ways to improve and produce new fish species in land-based contained systems, including salmon. Globally, protein demand is increasing. There will need to be a transformational shift in food production across all sectors to meet these needs. Moreover, consumers are demanding sustainability and full traceability of their food, particularly seafood. Matorka is uniquely positioned to answer these consumer needs and to provide the healthiest product possible. Land-based fish farming may lack the romance of long-line fishing, but there are undoubtedly many fish stocks that could use a reprieve from the world’s overfished oceans.

This article was originally published by Green by Iceland.

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Hot Ideas from a Cold Country

October 12, 2021

Icelandic companies are offering green energy solutions

When you think of Iceland, you may imagine remote settings, pristine nature, and erupting volcanoes. But did you know that Iceland is also a champion of renewable energy and sustainable solutions? Iceland has relied on renewable energy for nearly all its electricity and heating needs for more than half a century. The nation’s electricity is generated through hydropower and geothermal energy. Iceland’s geothermal power plants produce renewable electricity and make full use of geothermal hot water, steam, cold water, and even carbon dioxide (CO2). Iceland is also exporting its geothermal energy expertise and implementing sustainable energy projects in countries all over the world, including the United States.

Icelanders have a long history of maximizing resources, and their sustainable energy solutions are no exception. In addition to harnessing the power of renewable energy, Icelandic leadership and expertise includes innovations in recycling and the ability to capture, store and transform carbon emissions, protecting the environment from their harmful effects. As part of its commitment to sustainable energy solutions, Iceland is working toward the goal of carbon neutrality by 2040 and is set to become the first fossil fuel–free country in the world by 2050.

Here are several groundbreaking Icelandic companies championing green solutions for a more sustainable future.

  1. Converting to clean geothermal energy

Arctic Green Energy Corporation is a leading developer and operator of green energy projects, with a mission to export Icelandic success and leadership in geothermal and other renewables to markets in Europe and Asia. The impact of Icelandic solutions and expertise abroad is clearly seen in Arctic Green’s operations in China. Through a project with Arctic Green subsidiary Sinopec Green Energy, geothermal district heating in China has already led to tremendously positive environmental impacts as a replacement for coal. To date, Sinopec Green Energy has eliminated more than 11.4 million tons of CO2 emissions.

  1. Tapping geothermal and hydropower sources worldwide

ÍSOR Iceland GeoSurvey provides geothermal and hydropower research and development services to the Icelandic power industry as well as numerous foreign companies and governments all over the world. ISOR hosts the GRO Geothermal Training Programme, which promotes the utilization and sustainable management of reliable, economically viable and environmentally sound geothermal energy resources by training representatives from developing countries.

  1. Innovative ways to tap into wind power

Icewind designs uniquely shaped, robust vertical axis wind turbines that can withstand a variety of challenging environments, with low operation costs. The turbines are designed for telecom, surveillance, and commercial use anywhere you want clean electricity. They are notably weather-resistant, made for extreme conditions and remote areas.

  1. Finding a permanent storage solution for CO2

Carbfix provides a natural and permanent CO2 storage solution by turning CO2 into stone underground in less than two years. The Carbfix mineral storage technology provides an economic and efficient way of permanently removing previously emitted CO2 from the atmosphere, a key component of meeting the world’s climate goals outlined by the Paris Agreement.

  1. Recycling CO2into fuel and chemicals

Carbon Recycling International (CRI) captures CO2 emissions from any polluting source and turns them into methanol — which can then be used as fuel or as a base for other chemical compounds. The company works with industries around the world to develop valuable products from waste gases and renewable energy.

  1. Using geothermal energy to reduce plastic waste

Pure North recycles plastic using geothermal energy. Using hot water rather than chemicals to clean the plastic, they then turn that plastic directly into a product that can be used again locally in a circular fashion. The company envisions a future where all plastic in Iceland is recycled locally to eliminate plastic waste export.

  1. Enabling banking app users to track and reduce their carbon footprint

The latest innovation from the fintech company Meniga is Carbon Insight, a white label carbon calculator and engagement tool that enables people to track their carbon footprint based on their purchases, change their habits to minimize their environmental impact, and take action to offset the remaining footprint.

“As Iceland is one of the world leaders in geothermal energy and other innovative, sustainable solutions, our country is eager to share those solutions to help improve the environment everywhere,” said Einar Hansen Tomasson, head of Energy and Green Solutions at Business Iceland. “The export of Icelandic renewable energy expertise is making, and will continue to make, a positive impact on the climate worldwide.”

Learn more about Iceland’s commitment to sharing green energy expertise and sustainable innovation at GreenByIceland.com.

This article was provided by GreenbyIceland.com

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Tłıchǫ Highway – Critical Infrastructure Connecting the Communities of the Northwest Territories

October 11, 2021

An indigenous-operated highway project to provide access from Highway 3 to the community of Whatì in the Northwest Territories, connecting the Canadian Arctic to the main national road system. This profile is part of our ongoing Sustainable Arctic Opportunities Series, in which we partnered with the Arctic Economic Council to profile businesses and projects in…

An indigenous-operated highway project to provide access from Highway 3 to the community of Whatì in the Northwest Territories, connecting the Canadian Arctic to the main national road system.

This profile is part of our ongoing Sustainable Arctic Opportunities Series, in which we partnered with the Arctic Economic Council to profile businesses and projects in the Arctic which represent active or recent investment opportunities, while demonstrating a strong commitment to sustainability. These profiles are just a sample of the vast spectrum of innovative and responsible businesses and organizations operating in the Arctic region. By presenting these businesses and letting them explain in their own words how they contribute to the region, we hope to show the breadth of opportunity and the enormous potential of the Arctic where, with a deep commitment to sustainability and respect for the environment, businesses and development projects can contribute positively to the communities that live there and the stewardship of this most spectacular area of our planet.

Key Information:

Organization name: Government of the Northwest Territories, Department of Infrastructure

Company headquarters: Yellowknife, NT, Canada

Sector/Industry: Infrastructure – Roads

Organization type: Public-private partnership

Project name: Tłıchǫ Highway (HWY 9), formerly Tłıchǫ All-Season Road

Project location: From NWT Hwy 3, km 196; to Community of Whatì

SDGs fulfilled and in what ways:

  • #3 Good health and wellbeing: ensuring the health and well-being of individuals at all ages,
  • #8 Decent work and economic growth: providing employment, decent work and sustainable economic growth,
  • #9 Industry, innovation and infrastructure: building resilient infrastructure to promote inclusive and sustainable industrialization,
  • #13 Climate action: taking urgent action to combat climate change

Project ownership/key stakeholders: The Project Owner is the Government of the Northwest Territories. PPP Canada, GNWT, Tłıchǫ Investment Corporation (TIC), North Star Infrastructure (NSI), and Kiewit are the primary stakeholders.

Project website: http://www.inf.gov.nt.ca/TlichoHighway

 

Company description:

The Government of the Northwest Territories (GNWT) employs approximately 4,800 employees who provide programs and various services for close to 44,000 residents.

Project description:

Tłıchǫ Highway is a two-lane, 97-kilometre gravel all-season road, providing a year-round connection from Whatìto Highway 3. The road top width is 8.5 metres including each lane of 3.75 metres width and another 0.5 metres width of shoulders on either side. There are four major structural bridges, two major structural culverts and more than one hundred drainage pipe culverts. This road is designed to RLU80 standards with a design speed of 80km/h for Rural Local undivided (Low Volume) and a posted speed limit of 70 km/h. This design standard is for year-round use by commercial and private vehicles according to the size and weight limitations outlined by NWT regulations. The highway project will increase access for the winter roads to the communities of Gamètì and Wekweètì.

Financials:

Total staff in Sub-Arctic:

At peak construction, 276 workers were employed, 128 NWT/Tłıchǫ residents, including 31 female employees.

Currently there are 115 employees; 46 are NWT/Tłıchǫ residents, including 16 female employees.

During the post construction Operation and Maintenance (next 25 years) phase, NSI will provide 8 to 11 NWT/Tłıchǫ residents with employment.

Production/outputs:

Two-lane all-season, gravel highway between NWT Highway 3 and the Community of Whatì

Project timeline:

  • Substantial Completion Nov 30, 2021 and final completion Nov 30, 2022, (O&M through to 2047).
  • Substantial Completion date– 30/11/2021
  • Final completion date – 30/11/2022
  • O&M through to 2047

Total Project Cost: CA$411.8M (US$307.084m)

Project funding sources: PPP Canada 25% and Government of NWT 75%

Investment needed/received: 25% from PPP Canada

Funding method desired : Equity

Project status: Funded, Under Construction. Road opening to public November 2021

Other significant metrics: 3 years of Construction and 25 years of O & M for total project cost.

Investment spending breakdown:

The capital cost of the project is CA$200m (US$149m). The value of the contract with North Star Infrastructure over the 28 years is CA$411.8m (US$307m), comprised of the following:

  • GNWT Substantial Completion payment: CA$110.4m (US$82.3m)
  • Service Payment – Capital Portion: CA$148.5 million (US$110.7m)
  • Service Payment – OMR Portion: $152.9 million (US$114m)

The Tłı̨chǫ Government is an equity partner (20%) in North Star Infrastructure GP

Interview Questions:

What are your project’s biggest positive contributions to the Arctic, at the regional or local level?

The project’s biggest contribution to the Arctic is its Infrastructure development. This has a very important role in the longevity and health of local communities. Firstly, the Tłı̨chǫ Highway project will essentially improve the ease of access to various health care services for local residents. Secondly, there will be improved access to goods and services that will reduce the cost of living in the region. And thirdly, the project brings support concerning new social and employment opportunities while helping attract further interest from industry in the exploration and development of natural resources.

How does your project help develop human capital in the communities where it’s located?

Providing employment and economic development opportunities ensures communities remain healthy and vibrant. North Star Infrastructure GP has signed up to a detailed training plan that requires them to employ and train Tłı̨chǫ Citizens into various roles through the construction, operations, and maintenance periods – with particular attention towards creating opportunities for women and youth. This will ensure that significant knowledge and capacity transfer occurs, building on the skills that already exist within the Tłı̨chǫ Communities. North Star Infrastructure GP is contractually obligated to ensure Tłı̨chǫ, Northern and Local Businesses deliver a meaningful proportion of the project, and achievement of these obligations will be carefully monitored by the GNWT. The employment and training opportunities associated with the project allows residents to better support themselves and supports the development of a strong northern workforce.

How have you ensured inclusive and equitable consultations with local/indigenous communities?

The Tłı̨chǫ Highway project ensures inclusive and equitable consultations with the local communities through various collaborations. For example, as part of the project, North Star Infrastructure (NSI) has set up a Community Coordination Lead (CCL) who works directly with the local communities to solicit their inputs and needs while addressing grievances. Furthermore, the CCL’s responsibility includes coordinating workshops and training to develop the necessary skills of residents to get them ready for working life.

The Government of the Northwest Territories has been working collaboratively with the Tłı̨chǫ Government (TG) to advance the Tłı̨chǫ All-Season Road project, through the environmental assessment process, procurement and now construction. Since 2012, the Tłı̨chǫ Investment Corporation (TIC), the business wing of TG, has had an equity share in the project.

How does your project balance economic and social goals with environmental protection?

The Tłı̨chǫ Highway project has undergone an environmental assessment which was required under the Mackenzie Valley Resource Management Act (MVRMA). This assessment determined if the project was likely to have significant adverse impacts on the environment or be of public concern. The project was approved by the board and the Tłı̨chǫ Government has separately concurred with the board’s report. The report, conclusively, shows that the project balances economic and social goals while ensuring that the environment remains protected.

What specific mitigation measures, technological or otherwise, has your project put in place to safeguard the local environment?

The Tłı̨chǫ Highway project has put in place significant measures to ensure environmental protection and restrict potential future hazards. The current mitigation measures associated with the project to safeguard the environment include plans associated with permafrost, wildlife, caribou habitats, fish habitats and sediment erosion.

Primary Contact:

Name:

Public Affairs and Communications

Phone:

867-767-9088 ext. 31166

Position:

N/A

Do you know an Arctic business that would be a good candidate for the Sustainable Arctic Opportunities Series? Contact us at [email protected]

This profile was assembled for the Arctic Economic Council by the Polar Research and Policy Initiative, with funds provided by the Nordic Investment Bank.

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