What is Plan Nord?

www.pwc.com/ca/plannord
Destination Plan Nord
Capturing the mining
potential of Northern Quebec
Nochane Rousseau
Partner and Quebec Leader,
Mining and Plan Nord Initiative
PwC’s Americas School of Mines
May 15, 2012
• Population: 8 millions
• Mainly French speaking
What is Plan Nord?
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Agenda
1.
The Quebec Mining Industry
2. Why Plan Nord?
3. Infrastructure Needs
4. Société du Plan Nord and Investissement Québec
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The Quebec Mining Industry
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Mining industry
Driving Northern Quebec development
• Accounts for over 34,000 jobs in Quebec, of which 10,000 are located
in the Plan Nord territory
• Quebec ranking in Fraser Institute Survey: 5th place (2011 – proposed
new mining act), 4th place (2010 – changes to the mining duties) and
1st place (2009)
• Territory comprises four regions well-known for their
geological features:
• James Bay region: gold, diamonds, uranium, zinc and copper
• Nunavik: nickel and copper
• North Shore and Labrador Trough: iron, copper, zinc and nickel
• Saguenay–Lac-Saint-Jean: niobium and tantalum
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Mining industry
Driving Northern Quebec development (cont’d)
27 Active mines: $8.1B –
value of deliveries in 2011
37 Projects in evaluation
and development
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Quebec is competing with the major mining
regions across the world
• Skilled labor
• Global expertise
• Geological database
• Economic and political stability
• Size of the territory
• Large and diversified mineral potential
• Clean and affordable energy (hydro)
• Abundant water
• Plan Nord!
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Why Plan Nord?
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“Plan Nord has been elaborated to take a stance in this new
world, further broaden Quebec’s approach centred on
openness to the world and strategic alliances, and develop
our economic potential through a sustainable development
partnership that respects First Nations, the Inuit and local
communities.”
Jean Charest
Premier of Quebec
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A unifying vision
“Plan Nord must be an exemplary sustainable
development project that integrates energy, mining,
forest, bio-food, tourism, and transportation
development, the development of wildlife,
environmental protection, and the preservation of
biodiversity. It will foster development for the benefit of the
communities concerned and Quebec overall, in a spirit of
respect for cultures and identities.”
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Why Plan Nord?
• Economic development project
• Develop Quebec’s resource potential and respond to China and
India demands
• Decrease Quebec dependency to its principal business partner
(US)
• Plan Nord may be an antidote to economic slowdown (e.g. 2008)
• Strategic occupation of the territory
• Arctic (high potential for natural resources)
• Northwest Passage
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Quebec’s Development
Locality
Airport
Hydroelectric station
Hydroelectric lines
Roads
Northern limit for commercial
attribution of wood
Mines (M)
Hydroelectricity (H)
Forestry (F)
Agriculture (A)
Next 100 years
(M)
Actual (MH)
100 years (MHF)
200 years (MHFA)
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JM Lulin, Azimut Exploration, 2010
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Area covered by Plan Nord
• North of the 49th parallel
• 1.2 million km2 – Almost twice
the size of Texas!
• 72% of Quebec’s geographic area
• Less than 2% of Quebec’s
population
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A vast territory to discover
A bright future with promising
projects for Aboriginal and local
communities:
• Over 120,ooo people
(including 33,000 Aboriginals)
• 4 Nations: Inuit, Cree, Innu
and Naskapi
• 32 Communities located in the
James Bay, Saguenay and CôteNord regions
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Development of economic potential
• Energy
• Mining
• Forest
• Wildlife
• Tourism
• Bio-food
Broader economic activity will
impact Quebec as a whole
• Over $80 billion in public and private
investment in the Plan Nord territory:
– $47 billion from Hydro-Québec (HQ) in
renewable energy development
 Develop an additional 3,500 megawatts of
clean, renewable energy
 Connected and not connected projects to
the HQ power grid
– $33 billion in mining and public
infrastructure sectors
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Mining industry
Driving Northern Quebec development
At least 11 new projects are under
development:
• Generate over $11 billion in
investments
• Create 11,000 jobs in the
construction phase, and nearly
4,000 jobs a year once in
operation
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Mining industry
Driving Northern Quebec development (cont’d)
11 New projects
Xstrata Nickel
Raglan Mine, phase 2
Location
Mineral ore
Investment
Northern Quebec (Nunavik)
Nickel,
Copper
$500M
Saguenay–
Lac-Saint-Jean
Niobium,
Tantalum
$275M - $325M
Côte-Nord
Iron
$360M
Côte-Nord
Iron
$2.1B
Northern Quebec
(James Bay/Eeyou Istchee)
Uranium
$340M
(Press release, August 2011)
MDN
Crevier project
(Preliminary Economic Assessment, March 2010)
New Millennium Iron
Corporation
DSO project
(Feasibility study, February 2011)
ArcelorMittal Mines Canada
Mont-Wright and Port-Cartier
projects
(Press release, March 2011)
Strateco Resources
Matoush project
(Preliminary Economic Assessment, April 2010)
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Mining industry
Driving Northern Quebec development (cont’d)
11 New projects (cont’d)
Location
Mineral ore
Investment
Stornoway Diamond
Corporation
Renard project
Northern Quebec
(James Bay/Eeyou Istchee)
Diamonds
$800M
Northern Quebec (Nunavik)
Nickel,
Copper
$800M
Côte-Nord
Apatite
$750M
Northern Quebec
(James Bay/Eeyou Istchee)
Zinc,
Copper
$160M
Northern Quebec
(James Bay/Eeyou Istchee)
Gold
$40M
Northern Quebec
(James Bay/Eeyou Istchee)
Gold
$1.4B
(Feasibility study, November 2011)
Canadian Royalties, a subsidiary of
Jien Canada Mining
Nunavik nickel project
Mine Arnaud
Arnaud project (Yara International)
(Website)
Xstrata Zinc
Bracemac-McLeod project
(Feasibility study, September 2010)
Metanor Resources
Bachelor Lake project
(43-101 Technical report, April 2011)
Mines Opinaca, a subsidiary
of Goldcorp Éléonore project
(Press release, February 2011)
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Mining industry
Driving Northern Quebec development (cont’d)
Other projects
Attikamagen (Champion Minerals Inc.)
B-Zone (Quest Rare Minerals)
Mineral ore
Iron
Rare earths, yttrium, zircon
Belleterre (Conway Resources Inc.)
Gold
BlackRock (BlackRock Metals Inc.)
Iron, titanium, vanadium
Duncan (Ressources minières Augyva inc.)
Eastmain/Rose (Critical Elements Corp.)
Great Whale Iron (Niocan Inc.)
James Bay Lithium (Lithium One Inc.)
KéMag (New Millenium)
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Iron
Lithium
Iron
Lithium
Iron, titanium, vanadium
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Mining industry
Driving Northern Quebec development (cont’d)
Other projects
Lac à Paul (Ressources d’Arianne)
MacLeod Lake (Western Troy Capital Resources Inc.)
Mineral ore
Apatite
Gold, copper, zinc
Lac Otelnuk (Adriana Resources Inc.)
Iron
Lac Tio (Rio Tinto Fer et Titane Inc.)
Iron, titanium
Langlois (Nyrstar Canada)
Oceanic Iron Ore Corp.
PD1 (Xstrata)
Vezza (N. A. Palladium Ltd.)
Whabouchi (Nemaska Exploration Inc.)
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Gold, copper, zinc
Iron
Gold, copper, zinc
Gold
Lithium
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Infrastructure Needs
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Plan Nord in numbers
Actual transportation infrastructure in the Plan Nord territory
Type
Infrastructures
Rail
1,190 km of rail lines making up the railway network
5 private rail networks
Marine
4 of Quebec’s 10 largest ports by tonnage handled
Port of Sept-Îles is the third largest in Canada by tonnage handled
Air
46 airport infrastructure elements, including 26 airports and 6 heliports
(government administered)
Roads
51 000 km of logging roads
West region – concentrated within the James Bay/Eeyou Istchee region
East region – Routes 138, 389 and 385
Hydroelectric
21 hydroelectric stations
Housing
2 400 public housing units (often overpopulated and require renovation)
Few owner-occupants in Nunavik (high construction and occupancy costs)
Source: Plan Nord, Building Northern Quebec Together, The Project of a Generation. Government of Quebec. 2011
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Transportation infrastructures
Hydroelectric
infrastructures
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Mining industry’s infrastructure needs
• At the beginning of Quebec’s new mining boom (around 2008–
2009), mining companies used the existing transportation
infrastructure, mostly built during the 1950s to 1970s
• This “historical” infrastructure is now being used at almost full
capacity
• The mining industry’s continued development in Quebec depends on
the provision of new infrastructure
• Contribution from public and private partners to fund investments
for transportation infrastructure
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Making Northern Quebec accessible
Projects already under way or
pending:
This year, Quebec government will be
spending $51 million mainly on studies:
• upgrading of northern airports
• $10 million for Hydro-Quebec to
evaluate the feasibility of extending
the hydroelectric network towards
Nunavik
• construction or rebuilding of four
major roads
• studies for new deep-water port
• studies of possibly opening up the
Northwest Passage
• $30 million for Gaz Metro to analyze
the possibility of extending its gas
pipeline to the North Shore
• Caisse de depôt to work with
Canadian National on a railway projet
aimed at linking the port of Sept Iles
with Kuujjuaq
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Making Northern Quebec accessible (cont’d)
Examples of a public-private partnership between Stornoway and the
Quebec government – Renard Diamond Project
• Owned 37% by the Quebec government
• $331.6 million for the construction of the Route 167 extension
• Two separate agreements executed, Stornoway has agreed to:
- Contribute $44 million, amortized over a ten-year period, starting in July 2015 and
financed by Quebec at 6.3%. Partly conditional on:
◦ completion of the road on schedule
◦ receipt of all regulatory approvals for the construction of the Renard project
◦ successful completion of Renard project financing
- Contribute a maximum of $5,000 per km, or $1.215 million per year, to the
maintenance of the road during operation.
• Other partners may also be called upon to contribute to the financing of this
infrastructure
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Société du Plan Nord and
Investissement Québec
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Société du Plan Nord
• To be created in 2012
• Proposed Bill n°27 : An Act respecting the Société du Plan Nord is
currently under consideration by the Assembly
• A government corporation to coordinate implementing Plan Nord by:
• coordinating public investment in infrastructure and the social sector
• coordinating the implementation of projects included in the action plan
• negotiating financing packages for the projects it’s responsible for
• acting as a key partner for local and Aboriginal communities
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Plan Nord financial framework
Creation of Fonds du Plan Nord:
• A special-purpose fund devoted to the Plan Nord
• Innovative funding:
• Will be funded by a portion of the tax revenues generated from economic
activities carried out in Northern Quebec. These tax revenues will be
collected from new mining projects, new Hydro-Québec projects and
public infrastructure projects
• Contributions that will be required from private and public partners to
fund infrastructure built for their own use will also serve as a source of
revenue for the Fund
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Expected financing structure for Plan Nord
Source: Plan Nord, Building Northern Quebec Together, The Project of a Generation. Government of Quebec. 2011
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Investissement Québec
• Investissement Québec is both a financial institution and an
economic development agency of the Quebec government
• $1.2B available for mining projects allocated to Investissement
Québec for equity interest:
- Capital stock
- Convertible debenture
- Joint ventures
- Etc.
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PwC Plan Nord Team
Leader,
Plan Nord initiative
Mining
Nochane Rousseau
514 205 5199
PwC
Engineering and
Construction
Sonia Boisvert
514 205 5312
Infrastructure and
Project Finance
Richard Deslauriers
514 205 5045
Sustainability
Janice Noronha
514 205 5693
Government and
Public Services
Daniel Cadoret
418 691 2433
Inuit and First Nations
Marc-Stéphane Pennee
514 205 5006
Energy
Marc Fournier
514 205 5201
Client Relationship
Management
Dominique Fortier
514 205 5150
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