Northern News Services
"The Nanisivik town site was created for the mine. It never existed before the mine was built. But Arctic Bay was there. The mine being there has helped the local community," said the chairman and chief executive officer of mine-owner Breakwater Resources, Gordon Bub.
The September 2002 closure of Nanisivik's 25-year-old zinc mine means 200 people, including about 30 from Arctic Bay, will be out of work.
"They would be probably the highest income earners in that community," said Bub who agreed that the closure will be devastating to the neighbouring community of Arctic Bay.
"There is a townsite there with houses and a hotel for singles and recreation facilities, common eating facilities and a dock and an airport," said Bub, describing Nanisivik.
Under the reclamation plan all of it will have to be removed.
Many of the miners fly in and out of the mine on regular rotations from southern points.
The Baffin Island mine lost $8.3 million in the first six months of 2001. The announcement follows TeckCominco's decision to close its Polaris Mine on Little Cornwallis Island. Polaris is expected to shut down its operation, which employs 240 people, next summer.
"The (closure) of Nanisivik is not temporary. We will be basically out of reserves - economically minable reserves September of next year," said Bub.
Even if the metal prices had stayed higher the mine's life would only have been expected to last an additional year.
"Demand for zinc, as with other commodities, has dropped and there is an oversupply of zinc right now," said Bub, explaining that the price of zinc is at an all-time low. Zinc prices peaked in the late 1980s at $1.80 per kilogram. Today the base metal price is a sluggish 75 cents a kilogram and falling.
Zinc is used to galvanize steel in the auto and construction industries. The American economic slow-down has caused a decrease in those business and less demand for product.
Breakwater's share price has been hit hard, moving from a high of $4.50 two years ago to less than 19 cents.
All of Breakwater's mines are primarily zinc. Nanisivik is the fourth zinc mine worldwide to close within the same week.
Breakwater Resources Ltd. is publicly traded on the Toronto Stock Exchange (BAR).