Serious doubts on the mega-project, Arianne Phosphate

Des doutes sérieux sur le mégaprojet Arianne Phosphate

Photo: Alexander Shields The Duty
The government Couillard supports the project, but experts question several aspects.

The government Couillard has endorsed and financially supported the massive mining project, Arianne Phosphate, in Saguenay–Lac-Saint-Jean. However, the experts of the ministry of the Environment of Quebec have expressed serious reservations in its regard, has found The Duty. Not only its cost-effectiveness would be very uncertain, but the marine terminal that will be built could result in significant environmental impacts.

The canadian environmental assessment Agency (CEAA) is currently evaluating the “marine terminal” which should be built on the Saguenay to export the ore of apatite, which would be extracted from the future mine of the Lac-à-Paul, at the rate of three million tonnes per year.

In the framework of this federal evaluation, the cea AGENCY in July released an “interim report” in view of the “public consultation” held in mid-summer and ends on Monday, August 13. In addition to its voluminous report, the Agency has put online several documents filed by various stakeholders, including an “analysis” of 337 pages produced by the ministry of sustainable Development, the Environment and the Fight against climate change (MDDELCC) of Québec.

In the annex of this document by the MDDELCC, there is an economic analysis dated march 21, 2018, and which seriously calls into doubt the viability of this project. The document is signed by Dick McCollough, senior economist at the directorate-general for environmental assessment and strategic ministry of the Environment of Quebec.

“Despite the optimistic tone of the managers of Arianne Phosphate, and port authorities found in the press releases and official documents, the financial position of Arianne Phosphate seems precarious, if not untenable in the short and medium terms, mainly due to the significant investments required for the project as a whole, the weakness of the price [of the phosphate on the markets], a saturated market and lack of financial partners “, he says in conclusion of his analysis.

“Also, without even taking into account the different environmental and social issues associated with the three components of the mining project [the mine, the road access to the port terminal and the terminal], the project taken in its entirety does not appear justifiable economically in the short or medium term, with a horizon of at least 10 years,” added Mr. McCollough.

The economist reminds us that the context of the market of phosphate rock (apatite is composed of phosphate) seems to be the least uncertain for the next few years. According to the forecasts of the world Bank, the price per tonne of phosphate, which is under US $ 100 for more than two years, is not expected to reach 125 $ before at least 2030. However, according to the data of Arianne Phosphate, quoted by the economist of the MDDELCC, the threshold of profitability of the project is estimated to be between $ 125 and $ 130 to the ton.

Evidence that the international market is difficult, the other project of mine of the apatite by the Quebec government is a shareholder, Mine Arnaud, Sept-Îles, is still at a standstill despite its approval in march 2015, and the millions injected by Quebec.

Arianne Phosphate, of which the mine alone would require investment of more than $ 1.2 billion, probably does not, however, the profitability of his project. “For us, Mine Arnaud or the future project in Senegal, or the study of an expansion in Peru are projects in the “environment phosphate” we need to take this into account but that do not have impact on the following things for Arianne. The year 2021 is a breaking point on the markets and we must be ready to use this window to deliver our production “, explains the head of operations, Jean-Sébastien David.

At the time of approving the construction of this important open-pit mine, 22 December 2015, the prime minister Philippe Couillard for its part, had stated that the project ” presents a potential economic spinoffs important for Quebec “. His government has also injected so far $ 3.4 million in the project.

Port to review

The analysis produced by the MDDELCC in the framework of the review of the AGENCY puts also in question the construction of the massive marine terminal for export, as provided for by the Saguenay port Authority, the promoter of this project of $ 260 million.

For the moment, it is planned to build a port, “multi-users” in Sainte-Rose-du-Nord, on the north shore of the Saguenay river, five kilometres from the marine park. “Based on the likely development in this sector of the territory, which will bring potential projects, a dock multi-users can avoid an application of multiplication of the infrastructure in the future,” says the director, marketing and projects, Frédéric Lebrun.

This portion of the project has not been studied in the framework of the evaluation of the Bureau d’audiences publiques sur l’environnement (BAPE) conducted in 2015, as the proponent considers that the project is under federal jurisdiction. In its report, the BAPE noted, however, that the mining project should be allowed only following an environmental assessment of the québec port project.

The experts of the MDDELCC today believe that it is not possible to “conclude as to the environmental acceptability” of such a terminal, which would have a length of 280 metres on the shore of the Saguenay. They stress as well that” an encroachment supplemental significant on the sea bottom, shore or in the terrestrial environment would be caused by the presence of infrastructure of such equipment, “but also that” its implementation would change significantly and irreversibly the landscape of the fjord “.

In this context, they recommend the construction of infrastructure ” smaller “, only for the project of Arianne Phosphate.