Wednesday, August 31, 2011

Arctic resource development has its challenges (and rewards) (FP)

Arctic has great riches, but greater challenges

Chris Wattie/Reuters

Chris Wattie/Reuters
Agnico-Eagle's Meadowbank gold mine is pictured near Baker Lake, Nunavut.
  Aug 31, 2011 – 10:00 AM ET Last Updated: Aug 31, 2011 10:23 AM ET
At the rim of the Arctic Circle in Canada, gold mining firm Agnico-Eagle is learning how tough it is to operate in a remote region with temptingly large, but frustratingly inaccessible, reserves of oil, gas and minerals.
Commentators rarely mention nightmarish logistics, polar bears and steel-snapping cold when they confidently predict that as the Arctic warms up, melting sea ice and shorter winters will open up the expanse to exploration.
But the rosy words obscure the reality of working in an icy wasteland that stretches across Russia, Scandinavia, Alaska and Canada. And rather than making life easier, the warming of the Arctic and the thawing of its permafrost could make operating here even more complicated.
A closer look at the far northern Canadian territory of Nunavut, one of the most promising areas for exploration, reveals challenges so huge that the Arctic may well turn out to be a niche market where big firms with a serious tolerance for risk and adversity develop a handful of major deposits.

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