Espoo Report Phase 2 Proposal – Mary River Project

Baffinland Iron Mines Corporation Mary River Project NIRB File No. 08MN053

Mary River Project Espoo Report Phase 2 Proposal

TABLE OF CONTENTS

Table of Contents ...... i List of Tables ...... ii List of Figures ...... ii Abbreviations and Acronyms ...... iii Executive Summary ...... iv 1 Introduction ...... 1 1.1 Project Overview and Background ...... 1 1.2 Regulatory Context ...... 2 2 Project Description ...... 4 2.1 Project Setting and Location ...... 4 2.2 Purpose and Need for Phase 2 Proposal ...... 6 2.3 Phase Two Components and Activities ...... 6 2.3.1 Mine Site ...... 6 2.3.2 Transportation ...... 8 2.3.3 Milne Port ...... 8 2.3.4 Shipping ...... 10 2.4 Schedule ...... 12 3 Alternatives Considered ...... 13 4 Environmental Assessment Approach and Methods ...... 15 4.1 Environmental Impact Assessment Methods ...... 15 4.2 Valued Ecosystem Components and Valued Socio-economic Components ...... 15 4.3 Assessment Boundaries ...... 16 4.4 Scoping of Transboundary Impact Assessment ...... 19 5 Identification of Environmental Impacts ...... 22 5.1 Climate Change ...... 22 5.1.1 Existing Conditions ...... 22 5.1.2 Potential Impacts ...... 23 5.1.3 Transboundary Evaluation ...... 23 5.2 Migratory Birds and Habitat (including Seabirds) ...... 24

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Mary River Project Espoo Report Phase 2 Proposal

5.2.1 Existing Conditions ...... 24 5.2.2 Potential Impacts ...... 24 5.2.3 Transboundary Evaluation ...... 25 5.3 Marine Habitat and Biota (Unplanned introduction of aquatic invasive species) ...... 25 5.3.1 Existing Conditions ...... 25 5.3.2 Potential Impacts ...... 26 5.3.3 Transboundary Evaluation ...... 27 5.4 Marine Mammals ...... 27 5.4.1 Existing Conditions ...... 27 5.4.2 Potential Impacts ...... 29 5.4.3 Transboundary Evaluation ...... 31 5.5 Knowledge Gaps and Uncertainties ...... 32 6 Accidents and Malfunctions ...... 33 7 Environmental Health and Safety Management ...... 36 7.1 Mitigation and Monitoring Programs ...... 36 7.2 Follow-up and Adaptive Management ...... 38 8 Overall Transboundary Impact ...... 39 9 References ...... 40

LIST OF TABLES

Table 4.1 VEC/VSECs Assessed for the Phase 2 Proposal ...... 16 Table 4.2 Overview of Spatial Assessment Boundaries ...... 17 Table 4.3 Scoping of Transboundary Impact Assessment ...... 20 Table 5.1 Marine Mammal Species with Potential to Occur in the MRSA ...... 28 Table 7.1 Overview of Key Environmental Management Documents Relevant to Management of Transboundary Effects ...... 37

LIST OF FIGURES

Figure 2-1 Project Location ...... 5 Figure 2-2 Phase 2 Proposal – Mine Site Infrastructure ...... 7 Figure 2-3 Phase 2 Proposal – Milne Port Infrastructure ...... 9 Figure 2-4 Store Hellefiskebank Anchorage ...... 11 Figure 4-1 Spatial Boundaries ...... 18

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Mary River Project Espoo Report Phase 2 Proposal

ABBREVIATIONS AND ACRONYMS

Approved Project ...... Mary River Project (as approved in 2012 and amended in 2014) Baffinland ...... Baffinland Iron Mines Corporation CAC ...... criteria air contaminant

CO2 ...... carbon dioxide

CO2e ...... carbon dioxide equivalents

CH4...... methane EEZ ...... Exclusive Economic Zone EMP ...... Environmental Management Plan EIS ...... Environmental Impact Statement FEIS ...... Final Environmental Impact Statement GHG ...... greenhouse gas IQ ...... Inuit Qaujimanituqangit LSA ...... Local Study Area MRSA ...... Marine Regional Study Area Mtpa ...... million tonnes per annum NIRB...... Nunavut Impact Review Board NPC ...... Nunavut Planning Commission NSA ...... Nunavut Settlement Area Nunavut Agreement ...... Nunavut Land Claims Agreement NWB ...... Nunavut Water Board PDA ...... Potential Development Area QIA ...... Qikiqtani Inuit Association RSA ...... Regional Study Area TRSA ...... Terrestrial Regional Study Area TSD ...... Technical Supporting Document TSP ...... total suspended particulate VEC ...... Valued Ecosystem Component VSEC ...... Valued Socio-economic Component

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Mary River Project Espoo Report Phase 2 Proposal Executive Summary

EXECUTIVE SUMMARY

Baffinland Iron Mines Corporation (Baffinland) currently operates an iron ore mine (the Mary River Project) on northern Baffin Island, in the Qikiqtani Region of Nunavut, in the Eastern Canadian Arctic. The Mary River Project (the Project) is the only operating mine and industrial operation in the Qikiqtani Region and is one of three operating mines in Nunavut. Baffinland is currently seeking regulatory approvals for amendments to the Mary River Project which include an increase in ore production, construction of a new railway to Milne Inlet, and expansion of existing port facilities at Milne Port and an increase in the nominal shipping season and number of vessels called to Mine Port annually (Phase 2 Proposal).

As part of the regulatory approval process for the Phase 2 Proposal, Baffinland must consider transboundary impacts in accordance with the Convention regarding the Environmental Impact Assessment in a Transboundary Context from February 25, 1991 (Espoo Convention). Denmark (Greenland) has been identified as an Affected Party under the Espoo Convention which may experience transboundary impacts associated with the Phase 2 Proposal. This document, the Espoo Report, has been prepared to provide Denmark with environmental impact assessment documentation to facilitate their participation in the regulatory approval process for the Phase 2 Proposal.

The Mary River Project currently has four active operating features: the mine site, the Northern transportation corridor, a port at Milne Inlet (Milne Port) and the northern shipping route. The northern shipping route associated with current Project operations extends from Milne Port and includes Eclipse Sound, Pond Inlet, and adjacent water bodies, into Baffin Bay.

The Phase 2 Proposal will allow for expansion of current Mary River Project operations. Pending regulatory approval to proceed, construction activities associated with Phase 2 Proposal components could start in 2021 and likely extend to 2024. Closure activities for the Mary River Project are expected to start in 2038.

To accommodate an increase in ore production and the construction of a new railway north from the mine to Milne Port, the Port must be expanded. This will include, but not be limited to, construction of a second dock that will be capable of accommodating capesize ore carriers. The shipping route for the Phase 2 Proposal remains unchanged from current operations but there will be the addition of a limited number of larger capesize ore carriers to the fleet of vessels calling on Milne Port and increased shipping frequency (maximum of 176 ore carrier voyages per year). The shipping window will occur between periods of land fast ice in Eclipse Sound and Milne Inlet, and not extending any further than July 1 to November 15. Although previously contemplated, there is no trans-shipping proposed as part of the Phase 2 Proposal shipping operations (i.e., only mine products originating at the Mary River Mine will be shipped). Store Hellefiskebank, an area offshore Greenland, may be used as an incidental anchoring area for ships waiting to call on Milne Port (i.e. estimated less than ten occurrences estimated in a year).

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Mary River Project Espoo Report Phase 2 Proposal Executive Summary

An environmental impact statement (EIS) was prepared for the Mary River Project in 2012. An Addendum was prepared in 2018 to meet specific, regulatory-issued guidelines for the environmental assessment of the Phase 2 Proposal. The Addendum and several technical supporting documents are currently being reviewed as part of the regulatory approval process for the Phase 2 Proposal. One of the technical supporting documents to the Addendum most relevant to the Espoo Report is a Cumulative and Transboundary Effects Assessment (TSD-27; Baffinland 2018b). The Cumulative and Transboundary Effects Assessment built on the extensive baseline studies and assessment that have been carried out since 2011 for the Mary River Project, including additional studies focused on the Phase 2 Proposal. Transboundary effects, which were defined in that exercise as effects potentially occurring outside the Nunavut Settlement Area (though not necessarily beyond international boundaries) were predicted to potentially occur for the following Valued Ecosystem Components (VECs):

• Climate Change (related to greenhouse gas emissions)

• Migratory Birds and Habitat

• Marine Habitat and Biota (primarily focused on aquatic invasive species in ballast water); and

• Marine Mammals.

Transboundary effects of the Phase 2 Proposal on these VECs were predicted to be not significant. No meaningful adverse socio-economic effects were expected to occur outside of Nunavut.

The Cumulative and Transboundary Effects Assessment has informed this Espoo Report along with additional focused analyses on issues of concern and recent monitoring results, to address potential transboundary impacts that could extend to Greenland.

Through the implementation of mitigation and monitoring measures (including associated adaptive management plans) intended to reduce or eliminate adverse effects on climate change, migratory birds and seabirds, and habitat, marine habitat and biota, and marine mammals, the risk of transboundary impacts occurring because of Phase 2 Proposal activities is very low and any transboundary effects in Greenland waters would be not significant.

A major fuel oil spill could result from the unlikely event of a Project vessel running aground or sinking, a collision of a vessel with another vessel or the marine terminal, or a major incident during fuel transfer from a tanker to shore. A major fuel spill could have critical consequences for seabirds, marine habitat and biota, and/or marine mammals. Depending on the spill volume and location, there could be significant transboundary effects. However, through diligent Project planning and design, and the implementation of effective mitigation measures, the likelihood of fuel spills will be reduced. Similarly, the implementation of emergency response measures as described in various emergency response plans which have been updated for Phase 2 Proposal activities, will reduce the potential consequences of adverse effects. Significant transboundary impacts due to a Project-related spill are therefore unlikely to occur.

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Mary River Project Espoo Report Phase 2 Proposal Introduction

1 INTRODUCTION

The Mary River Project is an operating iron ore mine located on northern Baffin Island, in the Qikiqtani Region of Nunavut, in the Eastern Canadian Arctic. Baffinland Iron Mines Corporation (Baffinland) is the owner and operator of the Mary River Project. The Nunavut Impact Review Board (NIRB) issued Project Certificate No. 005 for this Project on December 28, 2012, with an amended Project Certificate issued in 2014, 2018 and 2020 to account for increases in iron ore production levels and changes in transportation methods and routes (the Approved Project). Mining operations started in 2015 with the first iron ore shipped to Europe via Milne Port.

In 2017, Baffinland began seeking regulatory approvals for additional amendments to the Approved Project which include an increase in ore production, construction of a new railway to Milne Inlet, and expansion of existing port facilities at Milne Inlet and increase shipping through the Northern Shipping Route. These proposed changes to the Approved Project comprise the key elements of the Phase 2 Proposal. The NIRB determined that the Phase 2 Proposal should be assessed as a reconsideration of the existing Project Certificate under both the Nunavut Agreement and relevant provisions of the Nunavut Planning and Project Assessment Act.

One of the aspects of the Phase 2 Proposal under review by regulatory authorities is transboundary impacts. The Convention regarding the Environmental Impact Assessment in a Transboundary Context from February 25, 1991 (Espoo Convention) defines transboundary impact as “any impact, not exclusively of a global nature, within an area under the jurisdiction of a Party caused by a proposed activity the physical origin of which is situated wholly or in part within the area under the jurisdiction of another Party”. As a signatory to the Espoo Convention, the Government of Canada must notify any “Affected Party” to the Convention which is likely to be affected by the transboundary impact of a proposed activity. With respect to the Phase 2 Proposal of the Mary River Project, Denmark (Greenland) has been identified as an Affected Party which may experience transboundary impacts associated with marine shipping activities as part of the Phase 2 Proposal.

This document has been prepared pursuant to Article 4 of the Espoo Convention to provide Denmark with environmental impact assessment documentation to enable their submission of comments before a regulatory decision is taken by the NIRB on the Phase 2 Proposal.

1.1 Project Overview and Background Baffinland is a Canadian iron ore mining company whose main asset is the Mary River mine located on northern Baffin Island in the Nunavut Territory, Canada. Baffinland’s head office is in Oakville, Ontario (Canada), and the company also has community liaison offices in Iqaluit, Igloolik, Pond Inlet, Hall Beach, Clyde River, and Arctic Bay. Baffinland employs approximately 1,000 permanent and fixed-term employees.

The Mary River operation is the most northerly operating open pit mine in the world and the sixth most northerly mine of any type around the globe. The Mary River mine comprises three high grade iron ore deposits; Baffinland is currently mining Deposit 1. The Approved Project involves mining iron ore from the reserve at Deposit No. 1 at a production rate of 22.2 million tonnes per year (Mtpa), constructing a railway to transport the ore to market via a port at Steensby Inlet south of the mine, and trucking ore by an existing road north of the mine to a port at Milne Inlet (Milne Port). However, the railway from the mine to Steensby (South Railway) has

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Mary River Project Espoo Report Phase 2 Proposal Introduction

not yet been constructed and iron ore is currently being hauled by truck down the Tote Road to Milne Port where it is stockpiled for loading during the shipping season (currently July 15 to October 15).

Baffinland is seeking approval to proceed with Phase 2 of the Mary River Project which will allow Baffinland to transport ore by rail and ship from Milne Port, while retaining current authorizations for the construction and operation of the Steensby Port and South Railway as proposed in 2012. The total mine production would eventually increase to 30 Mtpa, with 12 Mtpa being transported via the North Railway to Milne Port, and 18 Mtpa transported via the South Railway to Steensby Port. This proposed expansion of the Mary River Project through the Phase 2 Proposal would help ensure financial stability, sustain community benefits and improve efficiencies in operations and environmental design.

1.2 Regulatory Context The regulatory process in Nunavut is primarily established by the Nunavut Land Claims Agreement, 1993 (Nunavut Agreement). The Qikiqtani Inuit Association (QIA), the regional Inuit association, has issued numerous agreements for the Mary River Project under the Nunavut Agreement including:

• Commercial Lease

• Quarry License

• Inuit Impact and Benefits Agreement

• Water Compensation Agreement

• Wildlife Compensation Agreement

The QIA may require additional agreements or modifications to these existing agreements to accommodate the Phase 2 Proposal.

The environmental assessment process in Nunavut is conducted by the NIRB under the Nunavut Planning and Project Assessment Act. The NIRB issued Project Certificate No. 005 for the Mary River Project on December 28, 2012, with amended Project Certificates issued in 2014, 2018 and 2020. The Project must also conform to the North Baffin Regional Land Use Plan, as overseen by the Nunavut Planning Commission (NPC). The Approved Project was recognized in amendments to the North Baffin Regional Land Use Plan. Baffinland is now seeking amendments to the Project Certificate and North Baffin Regional Land Use Plan to accommodate the Phase 2 Proposal.

The Approved Project also operates in accordance with two Water Licences issued by the Nunavut Water Board under the Nunavut Agreement, the Nunavut Waters and Nunavut Surface Rights Tribunal Act, and the Northwest Territories Water Regulations. The Phase 2 Proposal will require an amendment to one of these existing water licences.

In addition to the above certificates, licences, and agreements, the Mary River Project is subject to other federal and territorial permits and authorizations which may require amendment to accommodate the Phase 2 Proposal.

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Mary River Project Espoo Report Phase 2 Proposal Introduction

The Convention on Environmental Impact Assessment in a Transboundary Context was adopted in 1991 at Espoo, Finland (hence, referred to as the Espoo Convention) and came into force in 1997. The Espoo Convention is a comprehensive treaty on how countries should notify and consult each other on major projects that might have adverse environmental impacts beyond borders. As a signatory country, Canada is required to apply the provisions of the Espoo Convention when: a) the proposed activity is listed in the convention (e.g., mine) and if the proposed activity is likely to cause a significant adverse transboundary impact. In relation to this Project, Canada is the Party of Origin (jurisdiction under which a proposed operation if envisaged to take place) and Denmark (Greenland) would be the Affected Party which is likely to be affected by the transboundary impact of a proposed activity. The Espoo consultation process includes the preparation of environmental impact assessment documentation (Espoo Report) by the Party of Origin (Canada) for distribution to the Affected Party (Denmark), who then coordinates submission of comments to the competent authority (in this case the NIRB) before a final regulatory decision is made on whether the proposed activity (e.g., Phase 2 Proposal) can proceed.

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Mary River Project Espoo Report Phase 2 Proposal Project Description

2 PROJECT DESCRIPTION

2.1 Project Setting and Location The Mary River Project is located in northern Baffin Island, in the Nunavut Territory of the Eastern Canadian Arctic (Figure 2.1). Administratively, the Project is situated entirely within the Qikiqtani Region of Nunavut, and most Project components are located within the North Baffin Planning Region. The Mary River Project currently has two main operating features: the mine site (known as Deposit No.1) and the Milne Port. Milne Port, where ore is stockpiled and shipped, is located 100 km north of the mine on the north coast of Baffin Island. These two locations are currently connected by a 100 km road (Tote Road). The northern shipping route is associated with Milne Port and includes Eclipse Sound, Pond Inlet, and adjacent water bodies. The southern shipping route, which is part of the Approved Project but has not yet been used for Project shipping, includes vessel transit to and from Steensby Inlet through Foxe Basin.

Located in the Northern Arctic Ecozone, the climate is semi-arid, and permafrost coverage is continuous to a depth of 500 m, with an active layer of up to 2 m. Rivers and creeks freeze during winter, except for very large systems. Vegetative cover is minimal and surface water is abundant with thousands of small lakes and streams throughout the region. The region experiences near 24-hour darkness with less than two hours of twilight from November to January and continuous daylight from May to August.

The Mary River Project is the only operating mine and industrial operation in the Qikiqtani Region and is one of three operating mines in Nunavut. The five communities of the North Baffin region near the Mary River Project include Arctic Bay (280 km), Clyde River (415 km), Sanijarak (192 km), Igloolik (155 km), and Pond Inlet (160 km). Each of these communities has long term social, economic and environmental ties to the Project area.

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Mary River Project Espoo Report Phase 2 Proposal Project Description

Figure 2-1 Project Location

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Mary River Project Espoo Report Phase 2 Proposal Project Description

2.2 Purpose and Need for Phase 2 Proposal The purpose of the Mary River Project is to mine, crush and screen and transport to market lump and fine iron ore products in an environmentally sustainable manner and in quantities that provide Baffinland and its shareholders a return on investment and provide socioeconomic benefits to local and regional Inuit communities and stakeholders. The Phase 2 Proposal will allow for expansion of current Project operations, which is necessary for Baffinland to meet its customers’ demand and continue to provide these benefits. The Project has helped build healthy communities and strengthen partnerships between Baffinland and stakeholders and institutions. The Phase 2 Proposal will allow the Project to continue contributing to the development of infrastructure, skills training, employment, and business opportunities in Nunavut.

The Project has already made important improvements to existing transportation networks in the region. The Phase 2 Proposal will further contribute, through the addition of road, rail, and shipping infrastructure, in a responsible manner that seeks to optimize overall regional benefits and reduce adverse effects on existing land use and traditional travel routes (e.g., the addition of rail will open the Tote Road to public use).

The Government of Nunavut has focused on mine development as an economic driver and a non-economic catalyst for social changes. The sustainability approach adopted by Baffinland considers environmental and social factors as well as economic development.

2.3 Phase Two Components and Activities 2.3.1 Mine Site Under the Phase 2 Proposal, some mining infrastructure will be re-arranged to support the increase in mine production and accommodate new rail lines (Figure 2-1). Additional Phase 2 Proposal facilities and activities for construction and operation of the Project at the Mine Site will consist of:

• Changes to crushing and transport of ore

• Construction of the Mine Site North Railway Terminal

• Expansion of permanent fuel storage

• Expansion of the mine maintenance facilities and support administration buildings/facilities (e.g., warehouses, shops)

The total mine production will eventually increase to 30 million tonnes per annum (Mtpa), with 12 Mtpa transported via the North Railway to Milne Port and 18 Mtpa transported via the South Railway to Steensby Port.

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Mary River Project Espoo Report Phase 2 Proposal Project Description

Figure 2-2 Phase 2 Proposal – Mine Site Infrastructure

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Mary River Project Espoo Report Phase 2 Proposal Project Description

2.3.2 Transportation In addition to the increase in mine production, changes to transportation methods represent the most notable differences between the Approved Project and the Phase 2 Proposal.

A new railway (North Railway), approximately 110 km in length, will be constructed to carry iron ore from the Mine Site’s loading station to the unloading station at Milne Port. Most of the North Railway will be built immediately adjacent to the Tote Road to: remain in the Northern Transportation Corridor which was assessed in the FEIS (Baffinland 2012); reduce the overall terrestrial footprint of the Project; and avoid unknown terrain, potential geotechnical issues and culturally important sites. Following an extensive review of route alternatives in consultation with community members, Baffinland has selected a preferred route based on operational, maintenance and safety risk considerations and community preferences. It is estimated that rail operations on the North Railway will involve two to three trains, completing on average five to eight round trips per day.

2.3.3 Milne Port To accommodate the shipment of 12 Mtpa and the North Railway operation for the Phase 2 Proposal, the Milne Port must be expanded (refer to Figure 2-3). A second ore dock will be constructed capable of accommodating capesize ore carriers. The Phase 2 Proposal will also require additional modifications/expansion of ore stockpiling, new ore crushing/screening facility, and ore handling systems. Railway maintenance facilities will be added to service the North Railway.

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Mary River Project Espoo Report Phase 2 Proposal Project Description

Figure 2-3 Phase 2 Proposal – Milne Port Infrastructure

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Mary River Project Espoo Report Phase 2 Proposal Project Description

2.3.4 Shipping The shipping route for the Phase 2 Proposal remains unchanged from the northern shipping route for the Approved Project. However, changes to shipping operations include the addition of larger capsize ore carriers to the fleet of vessels calling on Milne Port and increased shipping frequency (maximum of 176 ore carrier voyages per year). The shipping window will occur between periods of land fast ice in Eclipse Sound and Milne Inlet, and not extend further than July 1 to November 15.

Although previously considered as a Project activity by Baffinland, trans-shipping is no longer a component of the Phase 2 Proposal. Based on previous plans to ship extensively during the ice cover period, trans-shipping was planned to reduce the need for custom-built ice breakers. With the current version of the Phase 2 Proposal, Baffinland has been able to avoid landfast icebreaking, thereby removing the need for trans-shipping.

Store Hellefiskebank, which extends approximately 100 nautical miles off the west coast of Greenland into Baffin Bay (between 66-68°N), was identified through the Phase 2 Proposal as an alternative staging area for vessels waiting to be called to Milne Port when transit restrictions during heavier ice conditions are in place. Store Hellefiskebank is identified in the Sailing Directions for West Greenland, produced by the Danish Geodata Agency, as a safe waiting place as it is generally ice-free during the shoulder seasons. Water depths range from 50 to 100 m. Figure 2-4 shows that the anchoring area is not a fixed point, but a general area used by vessels as safe for stopping, drifting and/or anchoring.

Using Store Hellefiskebank for incidental anchoring or staging would be at the discretion of vessels and would likely only occur under the following circumstances: there is limited ability to escort vessels to available anchorages and berths in Eclipse Sound and at Milne Port; there are unanticipated interruptions of loading activities at Milne Port; there are delays due to weather; or if there is the early arrival of vessel(s). Given these criteria, it is expected that there would likely be less than ten occurrences of anchoring at Store Hellefiskebank each year. No ballast water is expected to be released in the Store Hellefiskebank area. While at anchor in Store Hellefiskebank, lighting on board the vessel (anchor and deck lighting) will be maintained in accordance with the Danish Maritime Authority’s Order on regulations for preventing collisions at sea and Transport Canada’s Collision Regulations.

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Mary River Project Espoo Report Phase 2 Proposal Project Description

Figure 2-4 Store Hellefiskebank Anchorage

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Mary River Project Espoo Report Phase 2 Proposal Project Description

2.4 Schedule Pending the issuance of an amended Project Certificate from the NIRB, along with other required permits, licences and approvals, construction of Phase 2 components will begin in 2021 and likely extend to 2024 at which point shipping from Milne Port will increase to 12 Mtpa. Construction of the South Railway and Steensby Port is proposed to begin in 2024, with shipments of 18 Mtpa from Steensby Port beginning in 2028. Closure and post-closure activities are expected to start in 2038.

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Mary River Project Espoo Report Phase 2 Proposal Alternatives Considered

3 ALTERNATIVES CONSIDERED

During the environmental assessment process, Baffinland considered alternatives to the Project, as well as alternatives to carrying out the Project. Each alternative was evaluated based on technical and economic feasibility, as well as the potential environmental effects and community preferences. If an option was not technically or economically viable, it was not carried forward for further evaluation.

Several scenarios were considered as alternatives to the Project, including keeping the current mine production limit (i.e., the Approved Project), ceasing operations, increasing production to satisfy Phase 2 transportation limits, and developing the South Rail to the Steensby Port portion of the Project. As outlined in this document, implementing the Phase 2 Proposal is Baffinland’s preferred alternative. It allows the company to move to rail under a lower capital cost scenario and gain valuable operational experience with rail and at a higher production rate.

Key alternatives assessed for the Phase 2 Proposal include:

• Shipping Season Alternatives - Four shipping season alternatives were assessed. The preferred shipping alternative is an extended season from July 1 to November 15, which allows for operational flexibility and reduces potential impacts on Inuit use of the landfast ice. Baffinland will rely on several factors when deciding when to open and close each annual shipping season, including information on prevalent ice conditions based on community consultation regarding local land use activities and several technical and environmental determinants. Each season’s shipping activities will continue to be governed by prevailing ice conditions and Baffinland’s commitment that landfast ice must have broken along the entire Northern shipping route before the commencement of icebreaking and ice management operations. No icebreaking operations will occur during the ringed seal breeding, birthing, or nursing period. It is recognized that some degree of overlap may occur between icebreaking operations and seasonal migratory movement of narwhal (Monodo monoceros) in the marine Regional Study Area.

o Selected Option: Shipping will occur between periods of land fast ice in Eclipse Sound and Milne Inlet, and not extend further than July 1 to November 15.

• Northern Shipping Route Options – Baffinland evaluated two ship routing options (Lancaster Sound/Navy Board Inlet and Pond Inlet) for the Phase 2 Proposal. Shipping from Milne Inlet via Lancaster Sound and Navy Board Inlet results in an additional 130 nautical miles of steaming than shipping via Pond Inlet. Navy Board Inlet also tends to freeze-up earlier compared to Pond Inlet.

o Selected Option: Shipping route will be from Milne Inlet via Pond Inlet.

• Trans-shipping - Based on previous plans to ship extensively during the ice cover period, trans-shipping was planned to reduce the need for custom-built ice breakers. With the current Phase 2 Proposal, Baffinland has avoided shipping in ice thereby removing the need for trans-shipping.

o Selected Option: No trans-shipping.

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Mary River Project Espoo Report Phase 2 Proposal Alternatives Considered

• Transportation of Ore to Milne Port – Although rail transportation of ore to Milne Port was initially rejected primarily due to economic reasons, further evaluation during the Phase 2 Proposal environmental assessment process found that the railway could be constructed at a substantially lower cost than previously assumed and Baffinland has established a customer base that can accommodate the delivery of ore within the brief open water shipping season. Compared with truck transport, rail transportation is also better suited for hauling large quantities of ore, has a better return on investment, and a reduced environmental footprint due to reduced sensory disturbance and dust generation. Rail transport also reduces fuel consumption and greenhouse gas (GHG) emissions.

o Selected Option: Rail transportation of ore to Milne Port.

• Rail Alignment - Two route options leading to Milne Port were considered. The preferred route runs parallel to the existing Tote Road and is located within an established transportation corridor. Geotechnical investigations and feasibility studies have verified that a railway along this alignment is technically feasible and economically viable.

o Selected Option: Railway route parallel to existing Tote Road. Two additional minor alternatives were assessed regarding to specific Project components:

• Alternative Locations for a Second Ore Dock at Milne Port – Baffinland considered three potential dock locations for the new ore dock. The preferred alternative, located immediately east of the existing ore dock, reduces the need for a largely expanded development area and does not require underwater blasting to construct the dock.

o Selected Option: New ore dock immediately east of existing ore dock.

• Renewable Energy Sources – Alternative energy sources were evaluated previously in the FEIS. Diesel remains the preferred alternative because it can meet the Project’s power generation requirements consistently year-round, at an acceptable capital cost, with an acceptable timeframe for implementation. However, as part of its Climate Change Strategy, Baffinland is committed to exploring renewable energy opportunities. The use of wind turbines at Milne Port and the Mine Site is being considered as a means of reducing operating costs and site fuel consumption. The wind turbines’ capacity under consideration ranges from 3 MW to 4.2 MW per unit.

o Selected Option: Diesel remains preferred energy source, renewable energy sources still being explored.

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Espoo Report Mary River Project Environmental Assessment Approach and Phase 2 Proposal Methods

4 ENVIRONMENTAL ASSESSMENT APPROACH AND METHODS

4.1 Environmental Impact Assessment Methods The Phase 2 Proposal Addendum to the Final Environmental Impact Statement (FEIS Addendum) was prepared to meet the requirements of the NIRB as outlined in the Guidelines for the Preparation of the EIS (EIS Guidelines) which were issued in November 2009, and subsequently amended in November 2010 and October 2015.

The effects assessment methods applied for the Phase 2 Proposal (FEIS Addendum, Baffinland 2018a) were consistent with the approaches used to assess the Mary River Project in 2012 (FEIS, Baffinland 2012) and the Early Revenue Phase in 2013 (FEIS Addendum, Baffinland 2013), and involved the following steps:

• Identification of major Project activities during each phase of the Project

• Identification of Valued Ecosystem Components (VECs)/Valued Socio-economic Components (VSECs) and selection of appropriate key indicators and measurable parameters

• Establishment of assessment boundaries

• Identification of Project interactions

• Identification of mitigation measures and Environmental Management Plans (EMPs) to avoid, reduce or minimize potential effects

• Establishment of the framework for evaluating the significance of residual impacts

• Determination of the potential for a residual effect, and if anticipated, its significance

• Identification of monitoring plans and adaptive management strategies for incorporation into EMPs

4.2 Valued Ecosystem Components and Valued Socio-economic Components The VECs/VSECs considered in the environmental assessment for the Project were defined by the EIS Guidelines, with scoping of key indicators and measurable parameters informed, in part, by consultation and engagement results. Table 4.1 lists the VECs/VSECs assessed in the Phase 2 Proposal FEIS Addendum (Baffinland 2018a).

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Espoo Report Mary River Project Environmental Assessment Approach and Phase 2 Proposal Methods

Table 4.1 VEC/VSECs Assessed for the Phase 2 Proposal

VEC/VSEC Category VEC/VSEC Atmospheric Environment • Meteorology and Climate (including Climate Change) • Air Quality • Noise and Vibration Terrestrial Environment • Landforms, Soils and Permafrost • Vegetation • Birds and Bird Habitat (including Seabirds) • Terrestrial Wildlife and Wildlife Habitat Freshwater Aquatic Environment • Freshwater Quantity and Quality • Freshwater Biota and Habitat Marine Environment • Marine Ice, Water, and Sediment Quality • Marine Habitat and Biota • Marine Mammals Human Environment • Population Demographics • Education and Training • Livelihood and Employment • Economic Development and Self-reliance • Human Health and Well-being • Community Infrastructure and Public Services • Contracting and Business Opportunities • Culture, Resources, and Land Use • Benefits, Royalty, and Taxation • Governance and Leadership • Food Security1 1Food Security was assessed as a new VSEC in a stand-alone addendum (Baffinland 2019b) in response to a Qikiqtani Inuit Association request during the technical review of the Phase 2 Proposal.

4.3 Assessment Boundaries The environmental assessment was conducted within defined spatial and temporal boundaries. The effects assessment’s spatial boundaries were determined on a VEC- and VSEC-specific basis, defined by the anticipated zone of influence of Project effects. An overview of spatial boundaries for the assessment, particularly those that pertain to the assessment of transboundary effects, are described in Table 4.2 and shown on Figure 4-1. Temporal boundaries were based on the period within which the Project is expected to result in environmental or socio-economic effects in consideration of the following Project timeline:

• Construction (Phase 2 component): two-year time frame beginning in 2019 and ending in 2021 (this has subsequently been updated to commencing in 2021 and ending in 2024)

• Operation and Maintenance: 2018 to 2035

• Closure: three-year period

• Post Closure: until closure objectives are satisfied.

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Espoo Report Mary River Project Environmental Assessment Approach and Phase 2 Proposal Methods

Table 4.2 Overview of Spatial Assessment Boundaries Area Description Nunavut Settlement Area (NSA) • Territory formed through the Nunavut Land Claims Agreement negotiated to give title to Inuit-owned lands a separate territory and government from the Northwest Territories Potential Development Area (PDA) • Project sites, including the mine site and port sites, based on the physical extent of Project activities Local Study Area (LSA) • Area where there exists the reasonable potential for direct interaction due to Project activities (including routine and accidents/malfunctions) • Includes all existing and proposed Project facilities (PDAs), and the nominal shipping route in the NSA • Individual LSAs were defined for each biophysical environmental component, and for land use and other socio-economic components Regional Study Area (RSA) • Includes a separate Marine Regional Study Area and a Terrestrial Regional Study Area Marine Regional Study Area (MRSA) • Includes all coastal and open water areas associated with Project shipping (see Figure 2-4) within the NSA boundary Terrestrial Regional Study Area (TRSA) • Identified for terrestrial environment studies associated with the Project • Based on ecological boundaries and significant topographic and drainage features • Chosen to represent birds and their habitats at an ecologically relevant scale and to reflect regional habitat use and seasonal movement patterns on north Baffin Island • Approximately 21,054 km², encompassing the Mine Site, Tote Road to Milne Inlet, the South Railway to Steensby Inlet, the Milne Port, and Steensby Port Note: Spatial boundaries remain unchanged from the original assessment in the FEIS (Baffinland 2012).

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Espoo Report Mary River Project Environmental Assessment Approach and Phase 2 Proposal Methods

Figure 4-1 Spatial Boundaries

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Espoo Report Mary River Project Environmental Assessment Approach and Phase 2 Proposal Methods

4.4 Scoping of Transboundary Impact Assessment Following an assessment of Project-related effects and cumulative effects, transboundary impacts were considered for any residual effects that had the potential to occur outside of the Nunavut Settlement Area (NSA). The Cumulative and Transboundary Effects Assessment (TSD-27; Baffinland 2018b) was undertaken based on the extensive baseline studies and assessment that have been carried out since 2011 for the Mary River Project, including additional studies focused on the Phase 2 Proposal. The following sections rely substantially on this work.

Baffinland used the following process to determine which VECs and VSECs would be included in the assessment of transboundary effects:

• Conduct a screening to identify Project residual adverse effects that may result in transboundary effects (outside NSA)

• Determine whether the residual effects of the Project may operate cumulatively in a transboundary context with the environmental effects of projects or activities located in other jurisdictions

• Assess whether the Project will interact cumulatively in a meaningful way (i.e., is “likely” to heighten effects)

• Describe mitigation measures, where feasible, that may be applied where measurable effects are anticipated

• Describe the significance of the residual effect after mitigation is applied

If a VEC or VSEC is predicted to experience a residual effect with the potential to interact with projects and activities outside of the NSA, a discussion of transboundary effects is provided. Table 4-3 summarizes the results of the screening process to determine the scope of the transboundary impact assessment, including consideration of transboundary effects potentially occurring outside the NSA, but not necessarily extending into international jurisdictions. The Espoo Report’s focus is on transboundary effects that potentially extend beyond Canada’s border into international jurisdictions (Greenland). Considering these criteria, this Espoo Report for Greenland focuses on the following VECs for assessment of transboundary effects:

• Meteorology and Climate (including Climate Change)

• Migratory Birds and Bird Habitat (including Seabirds)

• Marine Habitat and Biota

• Marine Mammals

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Mary River Project Espoo Report Phase 2 Proposal Environmental Assessment Approach and Methods

Table 4.3 Scoping of Transboundary Impact Assessment VEC/VSEC Potential Effect(s) Characterization of Residual Effect(s) / Transboundary Scoping Considerations Significance Rating Cumulative Effects Potential for Transboundary Effects

Atmospheric Environment VECs

• Meteorology and Climate • Increase in GHG emissions Releases of GHGs from the Project are small in comparison to Nunavut and Canadian totals. GHG emissions will be Not significant Not significant Yes (including Climate Change) partially mitigated compared with current emissions by use of rail over road transport of ore. Although Project GHGs are predicted to be low in magnitude and not expected to contribute notably to Canadian or global GHG totals or In consideration of potential cumulative effects global climate change, these emissions could potentially contribute to cumulative climate change effects that could on climate change that could extend beyond the extend beyond the NSA. NSA, there is potential for transboundary effects related to GHG emissions and climate change.

• Air Quality • Increase in Criteria Air Concentrations of most CACs are not predicted to exceed thresholds outside of the PDAs. Exceedances of total Not significant Not significant No transboundary effects Contaminants (CACs) suspended particulate (TSP) are predicted to occur outside the PDAs under certain conditions. Once the new railroad is operational and ore is transported by rail instead of truck, dust emissions along the Northern Transportation Corridor will be reduced from current levels. Residual effect of the Project on air quality are predicted to be geographically confined to the Local Study Area (LSA) within the NSA.

• Noise and Vibration • Increase in noise levels Overall, the residual effects of the Project on noise and vibration are predicted to be geographically confined to the Not significant Not significant No transboundary effects • Increase in vibration levels LSA within the NSA.

Terrestrial Environment VECs

• Landforms, Soils, and • Effects on unique or valuable The railway embankment will cross glaciofluvial deposits and a large esker. The rail construction will also remove Not significant Not significant No transboundary effects Permafrost landforms existing bedrock outcrop. However, these features are not ecologically unique in the RSA. The potential for metal • Increase in geohazard risks leaching and acid rock drainage occurring from quarrying and rock cuts is considered unlikely as most of the affected • Increase in geochemical risks rock is sedimentary. Overall, the residual effects of the Project on landforms, soils, and permafrost are predicted to • Effects on paleontological resources be low in magnitude geographically confined to the LSA within the NSA.

• Vegetation • Change in vegetation abundance The Phase 2 Proposal may affect vegetation abundance and diversity in the PDA. Changes in vegetation health Not significant Not significant No transboundary effects and diversity resulting from TSP deposition and atmospheric emissions outside the PDA were predicted to be negligible compared • Change in vegetation health with natural variation. Residual effects of the Project on vegetation are predicted to be geographically confined primarily to the PDAs (as well as adjacent to the PDAs for dust deposition).

• Birds and Bird Habitat • Effects on habitat Residual effects of the Project on birds and bird habitat are predicted to be low in magnitude and generally confined Not significant Not significant Yes (including Seabirds) • Effects on risk of mortality to the TRSA and MRSA, but potentially affecting migratory birds and seabirds that live outside the NSA. Potential cumulative effects on migratory birds • Effects on health and seabirds migrating outside the NSA.

• Terrestrial Wildlife and • Effects on habitat Phase 2 Proposal components and activities may interact with terrestrial wildlife and habitat through collisions; Not significant Not significant No transboundary effects Wildlife Habitat • Effects on movement increased harvesting; direct loss or alteration of terrestrial wildlife habitat; barriers to wildlife movement within or • Effects on risk of mortality between habitats; and sensory disturbances. Residual effects of the Project on terrestrial wildlife and wildlife habitat are predicted to be geographically confined to the TRSA within the NSA. • Effects on health

Freshwater Aquatic Environment VECs • Freshwater Quantity and • Effects on water quantity As a result of the Phase 2 Proposal, freshwater quantity and quality may change due to changes in sedimentation Not significant Not significant No transboundary effects Quality • Effects on water quality rates, hydrology, metal concentrations and water flows via withdrawals and diversions. Overall, the residual effects of the Project on freshwater quantity and quality are predicted to be confined to the LSA.

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Mary River Project Espoo Report Phase 2 Proposal Environmental Assessment Approach and Methods

Table 4.3 Scoping of Transboundary Impact Assessment VEC/VSEC Potential Effect(s) Characterization of Residual Effect(s) / Transboundary Scoping Considerations Significance Rating Cumulative Effects Potential for Transboundary Effects

• Freshwater Biota and • Effects on health and condition of As a result of the Phase 2 Proposal, Arctic char habitat loss/alteration due to construction of North Railway is Not significant Not significant No transboundary effects Habitat Arctic char expected. In-water infrastructures may negatively affect fish passage. Water withdrawals for dust suppression may • Effects on habitat of Arctic char reduce shoreline habitat, and cause stranding or impingement on the water intakes. The water and sediment quality • Effects on risk of mortality of Arctic and quantity at the Mine Site and along the Northern Transportation Corridor may be negatively affected by char sediment inputs from ore production, transport, and related activities. Overall, the residual effects of the Project on freshwater biota and habitat are predicted to be geographically confined to the LSA.

Marine Environment VECs • Marine Habitat and Biota • Effects on marine fish habitat Phase 2 Proposal components and activities at Milne Port and along the northern shipping route may interact with Not significant Not significant Yes (aquatic invasive species) marine biota and habitat through habitat loss/alteration, acoustic disturbances, and invasive species introduction. • Effects on Arctic char health and Overall, the residual effect of the Project on marine habitat and biota is predicted to be geographically confined to Potential for transboundary effects related to condition the LSA and no potential transboundary effects are anticipated. There is the potential for unplanned aquatic invasive species invasive species introduction which could result in potential cumulative effects that could be realized outside the NSA.

• Marine Mammals • Change in habitat Phase 2 Proposal components and activities at Milne Port and the northern shipping route may interact with marine Not significant Not significant Yes • Acoustic disturbance effects mammal populations through ship strikes, acoustic disturbances, contaminant loading, and habitat loss. Potential for transboundary effects related to • Hearing impairment effects Overall, the residual effects of the Project on marine mammals are predicted to be low in magnitude and cumulative effects on whale species that migrate • Auditory masking effects geographically confined to the LSA, but potentially affecting migratory species that live outside the NSA (e.g., in and out of the NSA. • Effects on risk of mortality narwhal, beluga and bowhead whales overwinter off the coast of Greenland).

Human Environment VSECs • Population Demographics • Change in in-migration and/or out- The Project will employ workers based in southern Canada and will present business opportunities to businesses in Not significant Not significant Yes • Education and Training migration southern Canada. The Project will also pay federal royalties (aggregate) and tax revenues will accrue to the federal Positive transboundary effects are predicted to • Livelihood and Employment • Change in opportunities to gain and provincial governments through personal income taxes, corporate tax, fuel taxes and sales taxes. No meaningful skills adverse socio-economic effects are expected to occur outside of the NSA. occur with respect to the following VSECs: • Economic Development and Self-reliance • Change in employment • Education and training • Human Health and Well- • Change in household income and • Livelihood and employment being food security • Economic development and self-reliance • Community Infrastructure • Changes in parenting • and Public Services • Effects of community absence Human health and well-being • • Contracting and Business • Change in labour force capacity Contracting and business opportunities • Opportunities • Effects on competition for skilled Benefits, taxes and royalties • Culture, Resources and Land workers Use • Expansion of market for goods and • Benefits, Taxes and services However, although the geographic extent of these effects may extend beyond the NSA, they Royalties • Effects on harvesting and camps are not expected to extend beyond national • Governance and Leadership • Effects on travel and safety boundaries and are therefore not assessed in this • Changes in benefits, royalties and report. taxation

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Mary River Project Espoo Report Phase 2 Proposal Identification of Environmental Impacts

5 IDENTIFICATION OF ENVIRONMENTAL IMPACTS

VECs identified as potentially experiencing transboundary impacts are evaluated in this chapter of the Espoo Report. A brief description of existing conditions provides context for the evaluation of impacts. Potential impacts of Project activities are described, along with key mitigation measures to reduce adverse effects. Technical Supporting Documents and additional assessment materials that have been filed during the regulatory review process are referenced as applicable. Following a general discussion of potential impacts, an evaluation, including significance determination, is made of residual transboundary impacts.

5.1 Climate Change 5.1.1 Existing Conditions Climate change has become measurable and noticeable over the last few decades, particularly in the Arctic. Arctic land surface temperatures have increased substantially since the mid-20th century, and the future rate of warming is expected to exceed the global rate. Sea ice extent at summer minimum has decreased in the past decades, and the Arctic Ocean is projected to become nearly ice free in summer within this century. Since the late 1970s, global permafrost temperatures have increased between 0.5° and 2°C. In the Canadian High Arctic, permafrost temperatures at depths of 12 to 15 m have increased by 1.2 to 1.7°C between 1978 and 2008 (IPCC 2014a, Table 4.8).

Elders in Arctic Inuit communities have described recent climate changes such as warmer temperatures, decreasing winter precipitation, longer-term increases of cloud cover and less predictability of wind and precipitation, resulting in observations of receding glaciers, thawing of permafrost, thinner lake and sea ice, and changes in health, abundance and/or distribution of vegetation, and terrestrial and marine wildlife species (Gérin-Lajoie et al. 2016, cited in Baffinland 2018c).

Greenhouse gasses (GHG), including carbon dioxide (CO2) and methane (CH4) are recognized as the primary contributors to the heating of the earth’s atmosphere. Due to Nunavut’s small population and manufacturing base, total GHG emissions in Nunavut are currently very low. Based on the numbers reported in the emissions inventory conducted for the Project (refer to TSD-06; Baffinland 2018c), annual GHG emissions of the proposed mine represent 68% of the territorial emissions as reported in 2016. The Project’s annual emissions estimate is equivalent to 6.8% of GHG emissions from all Canadian mining operations and 0.07% of total GHG emissions in Canada in 2016.

Since the Project is multi-generational, management plans have taken into consideration long term climate scenarios when evaluating and planning for local risk and vulnerability.

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Mary River Project Espoo Report Phase 2 Proposal Identification of Environmental Impacts

5.1.2 Potential Impacts The Project will generate GHG emissions from the following activities:

• Onsite arctic diesel fuel consumption to operate mobile equipment and power generators

• Marine diesel used by tugs at both ports and ice management vessels at Steensby Port

• Release of methane from disturbances to permafrost occurring mainly during construction

The average annual direct GHG emissions for the Project are estimated to be 0.476 Mt CO2e/year. The Phase 2 Proposal will result in a temporary emission increase due to the construction of the North Railway and the expansion of Milne Port facilities, and the railway has the potential to increase permafrost disturbance and the associated release of stored methane. However, once the railway is operational, there will be reduced reliance on the diesel-based heavy truck transportation currently taking place.

Baffinland has also initiated several mitigation strategies around mobile and stationary equipment to reduce fuel consumption and associated emissions including GHGs. This includes implementing procurement policies to incorporate emission standards (e.g., purchase of the highest available tier engines for mobile equipment and power generation, where practicable) and installation of high efficiency LED lights at the crusher (to replace diesel-powered lighting systems).

The Project is expected to result in 12.4 Mt CO2e direct cumulative emissions (i.e., not including indirect emissions from other sources such as ore carriers, sealift deliveries, or air transport of workers and supplies) over the life of the mine. Releases of GHGs from the Project will approximately double Nunavut’s GHG emissions as it has a small population and manufacturing base, however, these are anticipated to be insignificant compared to Canadian totals over the same time period.

Given natural variability in temperature over time and accuracy of ambient temperature measurements, the warming attributed to the Project’s GHG emissions will not be detectable. Based on the National Research Council’s high estimate of global warming of 0.68°C per 1,000,000 Mt CO2e, the Project’s contribution to global warming would be 12.4 Mt CO2e x 0.68°C / 1,000,000 Mt CO2e ≈ 0.000008°C (Baffinland 2018c). Assuming the future development scenario of increased production to 60 Mtpa, the GHG emissions would roughly double, as would the Project’s contribution to global warming (0.000016°C instead of 0.000008°C) (Baffinland 2018c). The Project’s individual contribution to climate change (even considering increased production) is therefore not detectable, and the effect of the Project on climate change is not significant (Baffinland 2018c).

5.1.3 Transboundary Evaluation The Project’s GHG emissions could represent a potential transboundary effect in terms of adding to the cumulative climate warming effects of GHGs globally. However, given the scale of global greenhouse gas contributions, the Mary River Project, even under a high emissions scenario, will not cause measurable effects related to climate change and will not result in transboundary effects on climate change. Nevertheless, in consideration of the Project timeframe, Baffinland has taken into consideration current climate change scenarios and local risks and vulnerabilities in development of the Project.

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Mary River Project Espoo Report Phase 2 Proposal Identification of Environmental Impacts

5.2 Migratory Birds and Habitat (including Seabirds) 5.2.1 Existing Conditions The terrestrial and seabird species found on northern Baffin Island are generally reflective of those expected in the eastern Canadian Arctic. Most bird groups such as raptors, seabirds, shorebirds, songbirds, waterbirds, and waterfowl are represented by at least a few species found throughout the area. Bird studies conducted by Baffinland in the RSA between 2006 and 2016 have reported 64 four bird species between the TRSA and the MRSA, of which 45 species were observed or reported breeding. Given the migratory ranges of many of these species, Project-related effects could have transboundary implications for species outside of the NSA during the non-breeding season.

Staging and breeding habitats for numerous bird species are found in the Project area. Relatively low densities of songbirds and shorebirds and a relative abundance of raptors were recorded in the TRSA. Migratory songbird species observed in the Mary River area include Horned Lark (Eremophila alpestris), American Pipit (Anthus rubescens), Lapland Longspur (Calcarius lapponicus), and Snow Bunting (Plectrophenax nivalis). Shorebirds include American Golden Plover (Pluvialis dominica), Semipalmated Plover (Charadrius semipalmatus) and Sanderling (Calidris alba). Raptors found include rough-legged hawks (Buteo lagopus), Peregrine Falcon (Falco peregrinus), Gyrfalcon (Falco rusticolus), and Snowy Owl (Bubo scandiacus).

Some seabirds are abundant along the shipping route, including Thayer’s Gull (Larus thayeri), Thick-billed Murre (Uria lomvia), and Black-legged Kittiwak (Rissa tridactyla), and a known seabird colony on Cape Graham Moore, Bylot Island, near the shipping route. Ducks include King (Somateria spectabilis) and Common (S. mollissima) Eiders, and Long-tailed Duck (Clangula hyemalis). Four loon species (Gavia spp.) have been documented in the TRSA and MRSA.

Seven species at risk listed by the Committee on the Status of Endangered Wildlife in Canada (COSEWIC 2016b) or the Species at Risk Act have been recorded in the RSAs including Peregrine Falcon, Harlequin Duck (Histrionicus histroionicus), Red-necked Phalarope (Phalaropes lobatus), Red Knot (Calidris canutus), Short-eared Owl (Asio flammeus), Ivory Gull (Pagophila eburnea), and Ross’s Gull (Rhodostethia rosea).

5.2.2 Potential Impacts The Phase 2 Proposal may result in the following effects on migratory birds and seabirds:

• Direct habitat loss due to an expanded project development area

• Indirect habitat loss due to sensory impacts adjacent to the development area

• Direct mortalities due to collisions with road, rail, aircraft, and shipping traffic

• Direct or indirect mortalities from an accidental spill or release of contaminants

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Mary River Project Espoo Report Phase 2 Proposal Identification of Environmental Impacts

To reduce or avoid adverse impacts to migratory birds and seabirds the Mary River Project has implemented several mitigation strategies including but not limited to:

• Prohibiting employees from transporting and operating firearms for harvesting of birds and the enforcement of a no hunting policy

• Waste management strategies to prevent the attraction of carnivores and scavengers and to minimize depredation of active nests

• Awareness training for all employees regarding the importance of bird habitat as well as waste management training to reduce the likelihood of the bird presence

• Establishment of zones of avoidance where birds or their nests are encountered (including seabird colonies)

• Installation of bird diverters on the guy wires of communication towers and flashing red lights to mitigate the risk of collisions

• Pre-clearing nest surveys and implementation of set back distance buffers for active nest sites in areas scheduled to be disturbed during the nesting season

• Guidelines regarding air traffic altitude above ground when flying over area where migratory birds are present

These mitigation measures will remain in place for the Phase 2 Proposal with modifications made as necessary based on monitoring results and adaptive management plans. Specific to seabirds, Baffinland has an ongoing collaborative monitoring program with Environment and Climate Change Canada’s (ECCC’s) in Hudson Strait and Eclipse Sound. This important research will continue to inform Baffinland on any Project management actions that may be necessary to reduce Project-related harm to seabirds.

5.2.3 Transboundary Evaluation The overall effects of the Phase 2 Proposal on migratory birds and seabirds are not predicted to have serious implications for the regional populations of any species and their habitats. Bird mortalities from collisions with Project infrastructure and vehicles are expected to be limited to a few individuals of the most abundant species annually, with no measurable effect on regional populations (TSD-12, EDI 2018). Transboundary effects to migratory birds and seabirds will occur but will likely not be measurable at the population level, and hence will be not significant.

5.3 Marine Habitat and Biota (Unplanned introduction of aquatic invasive species) 5.3.1 Existing Conditions Coastal habitats of Milne Inlet are typical of periglacial coastal environments where most of the shoreline is dominated by either rock or coarse sediment beaches. A comprehensive inventory of aquatic species at Milne Inlet, at several trophic levels, was established through baseline studies and aquatic invasive species monitoring undertaken for the Project to date. Fifteen marine fish species were encountered during fish surveys conducted

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Mary River Project Espoo Report Phase 2 Proposal Identification of Environmental Impacts

from 2010 to 2019, with Arctic char being among the most abundant species encountered (Golder 2020c). Sculpins constituted a great majority of non-char fish species. Additional species encountered included Greenland cod (Gadus ogac), fishdoctor (Gymnelis viridis), fourline snakeblenny (Eumesogrammus parecisus), and to a lesser extent, common lumpfish (Cyclopterus lumpus) and Arctic cod (Boreogadus saida). To date, no indication of presence of any invasive species in the Milne Inlet ecosystem has been detected, with the exception of benthic infaunal species, Marenzelleria viridis. This species was verified through independent review to be a taxa flagged as potentially invasive. Further review is required to determine if presence in Milne Port is recent and/or whether the species is established (Baffinland 2020).

5.3.2 Potential Impacts The Phase 2 Proposal is predicted to result in the following effects related to AIS:

• increased risk of introduction of aquatic invasive species

In recognition of the increased shipping activity associated with the Phase 2 Proposal, ballast water dispersion modelling was conducted (TSD-18; Golder 2018a) with a subsequent risk assessment conducted for the introduction of aquatic invasive species from ballast water (TSD-21; Golder 2018b). A total of approximately 3,586,000 tonnes of ballast water is anticipated to be discharged into Milne Port during the shipping season each year. The ballast water dispersion model was validated using additional oceanographic data collected in Milne Inlet in 2018 (Golder 2019a). Direct field measurements of physical water parameters (i.e. current speed and direction and temperature and salinity) were used with measurements of physical water parameters near Milne Port and near Bruce Head and actual ballast water measurements as input. Based on this validation work, Golder (2019) confirmed that the model performs well and meets and/or exceeds industry standards for similar applications in similar environments, and that the model has alignment to the extent possible with measured currents in the Milne Inlet environment.

The aquatic invasive species risk assessment study (TSD-21; Golder 2018b) determined that with the large volume of ballast water discharged, the probability of aquatic invasive species being introduced at Milne Port is very high. However, this does not account for mitigation measures against the introduction of aquatic invasive species. Mid-ocean exchanges will reduce the potential that any water from a vessel’s port of origin will be discharged into Milne Inlet, and operationalization of the D-2 performance standard will greatly lower potential invasion risk Additionally, Baffinland requires all vessels to adhere to IMO International Guidelines for Biofouling Management (and any associated updates to these Guidelines) by including adherence to these Guidelines as a requirement in vessel procurement contracts.

The Marine Monitoring Plan for the Project monitors long-term and short-term effects of the Project on the marine environment to ensure the accuracy of effects predictions, assess the effectiveness of mitigation measures, and as necessary, identify adaptive management to be undertaken to avert or reduce unforeseen environmental effects. Ongoing sampling programs at Milne Port to assess changes to sediment quality, water quality, benthic infauna communities, and fish and fish health will continue throughout Phase 2 operations. Existing sampling programs of sediment, benthic and zooplankton tows to monitor for the presence at Milne Port and Ragged Island anchorage locations will also continue.

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Mary River Project Espoo Report Phase 2 Proposal Identification of Environmental Impacts

As part of the Phase 2 Proposal, Baffinland will develop a robust monitoring program design with input from DFO and other relevant parties that describes its plan for conducting ROV surveys of vessels to evaluate the extent of biofouling on ship hulls arriving in Milne Port prior to the 2022 shipping season. The sampling design will include appropriate sampling effort (with respect to number of vessels and coverage of each vessel) to evaluate differences in extent of biofouling across vessels with different biofouling management measures and histories to provide data for risk assessments to guide future monitoring and management of high risk vessels. Based on new information gathered through the program, Baffinland will develop a risk assessment and establish a risk-based sampling plan in consultation with DFO and Transport Canada to guide future monitoring and management of high risk vessels. This sampling plan will include a component for the monitoring of contaminants from each port and treatment type to assess potential chemical risks (e.g., from foreign ports or treatment residuals).

Effects of ballast water on marine water quality and sediment quality are not predicted to be significant.

5.3.3 Transboundary Evaluation The accidental introduction of aquatic invasive species potentially represents a potential transboundary effect and could occur under the following scenarios:

• If a local aquatic invertebrate species was introduced accidentally in another jurisdiction, or

• If an aquatic invasive species was accidentally introduced at Milne Port and was then subsequently transmitted to the marine waters in another jurisdiction via Milne Port.

Through adherence to all applicable regulations and IMO Guidelines as well as Baffinland’s commitments to conduct compliance monitoring to ensure adherence to these guidelines, the risk of aquatic invasive species transboundary impacts is low.

Overall, the effect of ballast water discharge on marine water quality after mitigation was assessed to be low in magnitude, local, frequent, medium term in duration and fully reversible; the effect was determined to be not significant (Golder 2018a). The potential transboundary effects of ballast water on sediment quality will have the same rating of not significant.

Given the implementation of mitigation measures and regulatory compliance, and ongoing monitoring programs with adaptive management, no significant transboundary effects are predicted for marine habitat and biota.

5.4 Marine Mammals 5.4.1 Existing Conditions At least ten species of marine mammals have the potential to occur in the MRSA at different times of the year (see Table 5.1). Most of these species have been assessed by the Committee on the Status of Endangered Wildlife in Canada as being of Special Concern, although Polar Bear is the only species in the MRSA protected under the Species at Risk Act (listed as Special Concern on Schedule 1). Inuit Qaujimanituqangit (IQ) collected by Jason Prno Consulting (2017) indicates that harbour porpoise (Phocoena phocoena), fin whale (Balaenoptera physalus), and sperm whale (Physeter microcephalus) have also been historically observed in the MRSA, though these anecdotal observations are scarce.

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Mary River Project Espoo Report Phase 2 Proposal Identification of Environmental Impacts

Table 5.1 Marine Mammal Species with Potential to Occur in the MRSA

Species Population or Conservation Status Presence in the MRSA subspecies SARA COSEWIC Bowhead Eastern No Special Concern • Regularly occur along the northern shipping route, Whale Canada-West Status* • Migrate north in spring and summer Greenland (Balaena • Winter in Hudson Strait and Davis Strait, and summer all population mysticetus) around Baffin Island and surrounding areas, as well as Hudson Bay and Northern Foxe Basin (Foxe Basin supports a bowhead nursery ground Beluga Whale Eastern High No Status Special Concern • Observed in relatively small numbers in Eclipse Sound and (Delphinapterus Arctic-Baffin Milne Inlet during the open-water period leucas) Bay population • Milne Inlet, Eclipse Sound and Pond Inlet are not considered important summering areas • No sightings recorded along the Northern Shipping Route during three consecutive years of aerial surveys conducted for Baffinland between 2013 and 2015 Narwhal Baffin Bay No Special Concern • Endemic to the Arctic, occurring in deep Arctic waters, (Monodon population Status* primarily in Baffin Bay, the eastern Canadian Arctic, and the monoceros) Greenland Sea • Present along the northern shipping route primarily during the open-water period • Calve and perhaps feed in Eclipse Sound and Milne Inlet Killer Whale Northwest No Special Concern • Found in Canadian Arctic throughout the year with majority (Orcinus orca) Atlantic / Status* of sightings occurring during summer Eastern Arctic • Observed hunting narwhal in and around Eclipse Sound, population Tremblay Sound and Milne Inlet and Koluktoo Bay • Rarely observed in or near pack ice; likely mobilize southward upon formation of pack-ice Atlantic Walrus Baffin Bay (High No Special Concern • Occur in small numbers along the northern shipping route (Odobenus Arctic) Status* during the open-water period rosmarus) population • Associated with moving pack ice over shallow waters of the Arctic coast for much of the year • Migrate south as the sea ice advances in fall and north as it recedes in spring Bearded Seal N/A No Status Data Deficient • Distribution largely determined by the presence of shallow (Erignathus water and distribution of ice barbatus) • Strong affinity for ice • Pupping is also known to occur throughout the region, as well as along the northern coast of Bylot Island Ringed Seal N/A No Special Concern • Present year-round along the northern shipping route, (Pusa hispida) Status* including the Milne Port site • Common throughout Baffin Bay and West Greenland and in the North Baffin region, with large numbers reported throughout Eclipse Sound during the spring • IQ indicates that ringed seal commonly occur throughout the pack ice and landfast ice areas, and also frequent established polynyas

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Mary River Project Espoo Report Phase 2 Proposal Identification of Environmental Impacts

Table 5.1 Marine Mammal Species with Potential to Occur in the MRSA

Species Population or Conservation Status Presence in the MRSA subspecies SARA COSEWIC Harp Seal Northwest No Status No Status • Seasonal visitors to the Arctic, arriving along the southwest (Pagophilus Atlantic coast of Greenland in late May and June and entering groenlandicus) population Lancaster Sound in July and August; most have left Canadian High Arctic and Greenland waters by October although small numbers may remain near the southwest Greenland coast until March Hooded Seal Western North No Status Not at Risk • Highly migratory species that tend to occur further offshore (Cystophora Atlantic stock than harp seal cristata) • Route of northward migration is poorly known, but it is believed that they follow the edge of the offshore pack ice along the eastern side of Baffin Island through Davis Strait • Small numbers of hooded seal appear in Lancaster Sound and northwest Baffin Bay during July and August • Rare in Eclipse Sound and generally remain in northwest Baffin Bay until October; southward migration observed in late September Polar Bear N/A Special Special Concern • Occur along the northern shipping route throughout the year (Ursus Concern in relatively small numbers maritimus) • Common in the RSA and throughout most of the Canadian Arctic Archipelago • Individuals belonging to the Baffin Bay population occupy drifting pack ice and landfast ice between Baffin Island and west Greenland during winter but can be concentrated along the landfast ice edge in Lancaster Sound; • Concentrated along the landfast ice edge near Pond Inlet and Navy Board Inlet during spring *Under consideration for addition to SARA.

5.4.2 Potential Impacts The Phase 2 Proposal assessed the following effects on marine mammals:

• loss of marine habitat due to port expansion

• disturbance, hearing impairment, and auditory masking from underwater noise generated by shipping and port construction (i.e., pile driving)

• potential injury or mortality to marine mammals from ship strikes along the Northern shipping route

Effects of Phase 2 Proposal activities were assessed for key marine mammal species including narwhals, beluga whales, and bowhead whales, as well as for ringed seals, bearded seals, walruses and polar bears.

There is potential for acoustic disturbance from ship noise along the Northern shipping route as well as vessel strikes on marine mammals which can cause serious injury or mortality through physical harm . With respect to the Northern shipping route, ringed seals, narwhal, beluga whales and bowhead whales may all be expected to encounter ship traffic in low to high frequencies. There have been no vessel strikes to date with marine

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Mary River Project Espoo Report Phase 2 Proposal Identification of Environmental Impacts

mammals. Polar bears and walruses are infrequent along the Northern shipping route in the open water season and are, therefore, not expected to experience acoustic disturbances from ship noise or vessel strikes. Baffinland has committed to using the walrus haul out buffer zone guidelines set by the US Fish and Wildlife Service (USFWS) and the US Federal Aviation Administration (FAA).

To mitigate potential vessel strikes, the Phase 2 Proposal includes reduced speed limits when transiting anywhere within the Northern shipping route (not to exceed 9 knots), and the maintenance of a constant course and speed when in transit. Given the planned mitigation, and low likelihood for marine mammal vessel strikes, vessel strikes are not expected to affect marine mammals at the population level.

Aerial surveys, shore-based monitoring, passive acoustic monitoring and a ship-based observer program were conducted in 2019 in support of the Mary River Project. The relative abundance of narwhal in 2019 appeared consistent with numbers recorded in previous years despite increased vessel traffic, suggesting that Baffinland’s shipping operations have not, thus far, caused permanent displacement of narwhal from the MRSA (and thus are unlikely to have affected the long-term viability of the Eclipse Sound narwhal stock) (Golder 2020a). Inuit researchers involved in the 2019 marine mammal monitoring program noted the reduced speed of the ore carriers (particularly compared to cruise ships in the area) do not appear to be changing narwhal presence or behaviour (Golder 2019b, 2020a). Results of the end of season aerial clearance survey confirm that no ice entrapments occurred in 2019 as a result of Project shipping (Golder 2020a).

Based on measurements of vessels in the field and/or conservative acoustic modeling results, it was determined that marine mammals would be exposed to noise above 120 dB (standard noise disturbance threshold for marine mammals) for a total of 2.5 hours per day during the summer shipping period, and for 5 to 9 hours per day during the spring shoulder season (depending on ice conditions) (Golder 2019c). Furthermore, considering the application of effective mitigation measures which are reflected in various project document including the assessment of ice-breaking operations on the marine biophysical environment(Golder 2019d) and the Draft Shipping and Marine Wildlife Management Plan (Baffinland 2019c). Examples include: limiting the number of transits in heavy ice conditions to create periods of quiescence, vessel speed restrictions, establishment of a floe-edge buffer zone and “no-go” zones in key calving areas) and commitment to monitor and adaptively manage, effects over the long-term, the Phase 2 Proposal is not likely to result in a significant environmental effect on narwhal or any other marine mammals.

Baffinland has committed to long-term marine mammal monitoring programs which will continue during Phase 2 Proposal operations to provide feedback on the validity of effects predictions and effectiveness of mitigation measures. Existing marine mammal monitoring programs that will continue throughout Phase 2 include the following:

• Placement of Marine Wildlife Observers aboard the icebreakers to minimize the potential for ship strikes

• Marine mammal aerial surveys for the purposes of conducting abundance and density estimates for the Eclipse Sound narwhal stock

• Collaborative narwhal tagging programs to monitor for fine-scale behavioural responses of narwhals to vessel presence

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Mary River Project Espoo Report Phase 2 Proposal Identification of Environmental Impacts

• Acoustic monitoring at multiple locations along the shipping route to validate sound propagation modelling and monitor for changes in vocal behaviour due to ship noise exposure

• Shore-based monitoring to assess relative abundance, proportion of immatures, and observed narwhal behavioural response to vessels.

In addition to carrying on the above monitoring, Baffinland has made the following commitments to be implemented during the Phase 2 Proposal operations:

• A ringed seal monitoring plan, which will incorporate Inuit perspectives into the design, planning and implementation phases

• A pilot project using remote technology to monitor for ship strikes along the shipping route within the NSA with the intent to determine the efficacy of mitigation to prevent ship strikes and of monitoring to detect ship strikes and any near misses

• Annual end of season narwhal entrapment clearance survey

5.4.3 Transboundary Evaluation Whale species (narwhal, beluga and bowhead whale) overwinter off the coast of Greenland, and hence Project- related residual effects to these marine mammal species within the NSA could indirectly result in transboundary effects (e.g., could affect harvest of species by communities along the shores of Baffin Bay outside the NSA). The effects of the Phase 2 Proposal to these species are low magnitude and are not predicted to have serious implications for the regional populations (TSD-24; Golder 2018c). Transboundary effects to these species may occur, but will likely not be measurable at the population level, and hence will be not significant. Monitoring results will be publicly available and may be used to inform adaptive management plans as well as regulatory environmental management and planning processes (e.g., allocation models used by Canada-Greenland Joint Commission on Beluga and Narwhal).

Baffinland recognizes that there may be interactions between its vessels and other activity outside the MRSA and agrees to participate as a key stakeholder in regional federal government initiatives and programs including federal initiatives aimed at evaluating regional cumulative effects in the Eastern Canadian Arctic. Baffinland has also committed to participating in a marine spatial planning exercise as an operator, should an appropriate regional body lead the initiative (Baffinland 2019a).

In consideration of precedent-setting mitigation measures that will effectively reduce Project-related impacts to marine mammals in the MRSA, Baffinland is confident that cumulative effects from the Project and other shipping in the MRSA will not be significant and will not result in significant transboundary effects.

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Mary River Project Espoo Report Phase 2 Proposal Identification of Environmental Impacts

5.5 Knowledge Gaps and Uncertainties Key knowledge gaps and uncertainties pertaining to this evaluation of transboundary impacts relates to the migratory behaviour of potentially impacted species. Most Project-related effects will be limited to local and regional assessment boundaries within the NSA. Baffinland has been conducting baseline and/or monitoring studies since 2012 and will continue to conduct environmental compliance and environmental effects monitoring programs, including monitoring and observations from Inuit observers, to confirm Project-related impact predictions, including potential transboundary impacts. Baffinland will also implement its adaptive management plans to adjust mitigation if required to reduce unacceptable impact levels including those that may be associated with transboundary effects.

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Mary River Project Espoo Report Phase 2 Proposal Accidents and Malfunctions

6 ACCIDENTS AND MALFUNCTIONS

Accidents and malfunctions refer to events that are not part of the normal operation of the Project. Even with the best planning and the implementation of preventative measures, the potential exists for accidents or malfunctions to occur during any Project phase, and if they occur, to potentially result in adverse environmental effects. Through good Project planning and design, and the implementation of effective mitigation measures, the adverse effects of accidents and malfunction on human health and the environment would be reduced.

Accidents and malfunctions were assessed as part of the Approved Project. A risk register was developed, identifying potential risks of accidents and malfunctions that could occur in association with Project components and activities, with risk ratings assigned based on consequence and likelihood of the event occurring. The Phase 2 Proposal does not materially alter the risk register for the Project.

Potential accidents and malfunctions that could occur at Milne Port, which could potentially result in effects on migratory birds and habitat, marine habitat and biota, and/or marine mammals, include the following:

• Diesel spill - ship to shore transfer resulting in contamination of the marine environment

• Congestion at Port resulting in damage to vessels, possible spills including of ore into the marine environment, production delay

• Hazardous material release resulting in environmental contamination

• Ice accumulation at Port resulting in damage to port infrastructure and vessels, production delay

• Introduction of invasive species (marine)

These accidental events were evaluated as having a low risk rating, based on the low probability of occurrence and predictions of insignificant to minor consequences should the event occur. With the possible exception of the introduction of marine invasive species, it is unlikely that any of these accidental events would result in transboundary effects.

Potential accidents and malfunctions that could occur during shipping, which could potentially result in effects on migratory birds and habitat, marine habitat and biota, and/or marine mammals, include the following:

• Collision with marine mammals resulting in harm to marine mammals

• Ship grounding resulting in damage to ship or possible harm to aquatic life

• Ice/ship interaction resulting in a delay or possible damage to vessel

• Collision with other vessels resulting in damage to ship, possible harm to aquatic life

• Major diesel spill along the shipping route resulting in contamination of marine and coastal environment along shipping route

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Mary River Project Espoo Report Phase 2 Proposal Accidents and Malfunctions

The risk ratings for these events ranged from very low to high.

A minor fuel spill in Milne Port is considered to be the most likely spill scenario anticipated to occur in the RSA. This would consist of a low volume spill resulting from equipment failure or operator error during ship-to-shore fuel transfer operations. A minor fuel spill at Milne Port is unlikely to result in adverse transboundary effects.

A major fuel oil spill could occur in the RSA as a result of a Project vessel running aground or sinking, a collision of a vessel with another vessel or the marine terminal, or a major incident during fuel transfer from tanker to shore. A major fuel spill could have critical consequences for migratory birds, marine habitat and biota, and/or marine mammals. Depending on the volume and location of the spill, and fate of the spilled material, it could potentially result in significant adverse transboundary effects.

Open-water fuel spill modelling was conducted for the Approved Project, for a hypothetical release of 5 million litres of diesel at Milne Port, and a hypothetical release of 5 million litres of diesel along the Milne Inlet-Eclipse Sound shipping route (Amec 2010). This modelling assumed no spill containment or emergency response action. Modelling results predicted that for both scenarios, over 90% of the diesel spill would evaporate or disperse within 96 hours (approximately 60% of the spill would evaporate and 30% would disperse in the water column). Under a worst-case scenario, for a spill along the shipping route, the slick was predicted to persist in the marine environment for up to two weeks. Although the likelihood of a major diesel spill occurring along the shipping route was low, the potential effects were considered to be significant (Baffinland 2012).

Updated fuel spill modelling was conducted for the Phase 2 Proposal in consideration of the proposed extension of the ore shipping season into times of ice formation and break-up (TSD-19; Baffinland 2018d). Fuel tankers would continue to deliver fuel to Milne Port during the open water season only; therefore, the updated spill modelling focused on a spill of fuel oil from an ore carrier. The results of the modelling showed that while the presence of ice would generally slow the oil’s path to shore compared to an ice-free scenario, if left unmitigated (approach taken for modelling), the spilled diesel would eventually reach the same shoreline areas as predicted during either ice or open-water conditions. The conclusions presented for the Approved Project remained unchanged for the Phase 2 Proposal (Baffinland 2018a).

A major fuel spill along the northern shipping route could result in changes to or loss of habitat, changes to or loss of food sources, or direct health effects to marine biota, including birds and marine mammals. Migratory birds are particularly vulnerable to oil (e.g., diesel), through oiling of feathers, inhalation of vapours, and ingestion of oil and oil-contaminated food. A significant effect on migratory birds in the RSA as a result of a large fuel spill could potentially result in a significant transboundary impact given the migratory nature of birds moving beyond NSA boundaries as well as the transport and dispersion of spilled oil. Through diligent Project planning and design, and the implementation of effective mitigation measures, the likelihood of fuel spills would be reduced. Similarly, the implementation of emergency response measures would reduce the consequences of adverse effects. Baffinland has several emergency response plans (see Table 7.1) which will be implemented as needed in the unlikely event of a spill. Baffinland has committed to conducting additional Arctic diesel fuel spill modelling to account for shoulder season shipping and will update emergency response plans as necessary.

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Mary River Project Espoo Report Phase 2 Proposal Accidents and Malfunctions

Vessels in transit to and from Milne Port will be under the care and control of vessel operators, operating in accordance with applicable marine transportation regulations. Shipping in international waters (i.e., outside Canada’s and Greenland’s territorial waters) will be subject to international shipping laws under the International Maritime Organization (IMO). Each vessel calling on Milne Port will have a Transport Canada approved Shipboard Oil Pollution Emergency Plan.

Through the implementation of effective mitigation measures, the potential for adverse transboundary effects of accidents and malfunctions are expected to be reduced to an acceptable level. A significant adverse effect could occur on migratory birds as a result of a major fuel spill during shipping which could potentially result in significant adverse transboundary impacts; however the likelihood of a significant impact occurring is very low.

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Espoo Report Mary River Project Environmental Health and Safety Phase 2 Proposal Management

7 ENVIRONMENTAL HEALTH AND SAFETY MANAGEMENT

Baffinland developed environmental management and monitoring documents to support the original applications for the Approved Project and has continued to update existing plans through its operations. These include:

• Construction, Operation, Reclamation and Closure Plans

• Water Use and Management Plans

• Waste Management Plans

• Health, Safety, Emergency Response and Contingency Plans

• Biophysical and Atmospheric Environment Plans

• Socio-economic Plans

The Phase 2 Proposal requires further updates to many of these mitigation and monitoring plans. In preparing these updated plans, Baffinland has consulted with regulatory agencies, the QIA, communities, Hunter and Trapper Organizations and members of public and stakeholder groups.

7.1 Mitigation and Monitoring Programs As part of the regulatory approval process for the Approved Project, various mitigation measures have been proposed and/or initiated and monitoring programs have been designed and implemented. Since the beginning of operations in 2014, Baffinland has successfully developed and implemented several monitoring programs. The results of these monitoring programs have been used to confirm effects predictions made in the FEIS and inform, where applicable, effects predictions and proposed mitigation measures in the Addendum for the Phase 2 Proposal.

On an annual basis, Baffinland reports on all its monitoring activities to the NIRB, the Nunavut Water Board (NWB), and the QIA. These annual reports are available on the NIRB and NWB registry. Table 7.1 summarizes key environmental management documents relevant to the management of transboundary effects.

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Espoo Report Mary River Project Environmental Health and Safety Phase 2 Proposal Management

Table 7.1 Overview of Key Environmental Management Documents Relevant to Management of Transboundary Effects

Relevant Transboundary Valued Ecosystem Component

Baffinland Report Title Overview Document No.

Climate Change Climate Migratory and Birds Habitat and Marine Habitat Biota Marine Mammals H337697-0000-01-126- Health and Safety Provides the overarching framework to control 0002 Management Plan environmental, health and safety risks of Project X X X X activities BAF-PH1-830-P16-0008 Environmental Describes the Operational Environmental Standards Protection Plan (OESs) to identify and address Project environmental issues and concerns and to provide guidance and control measures, to avoid or X X X X minimize potential negative impacts to the environment; includes protection of the marine environment and wildlife BAF-PH1-840-P16-0002 Emergency Identifies potential environmental, health and Response Plan safety emergencies that could arise during the life of the Project and establishes the framework for X X X X responding to these situations and applies to all aspects; represents the overarching plan which is supported by more detailed spill contingency plans BAF-PH1-830-P16-0036 Spill Contingency Addresses spills on land or water, excluding spills X X X Plan (SCP) during fuel transfer at Milne Port and spills at sea BAF-PH1-830-P16-0013 Oil Pollution Addresses ship to shore fuel transfer protocols at Emergency Plan - the Milne Port Oil Handling Facility (OHF), and X X X Milne Inlet (OPEP) response to spills if they occur during the fuel transfer process BAF-PH1-830-P16-0042 Spill at Sea Provides guidance on the actions and reporting Response Plan requirements during a fuel spill from Project X X X (SSRP) shipping operations BAF-PH1-830-P16-0026 Surface Water and Describes management processes and procedures Aquatic Ecosystems to limit the potential for adverse impacts to Management Plan receiving waters, aquatic ecosystems, fish and fish X X X habitat; includes mitigation to reduce risk of invasive species BAF-PH1-830-P16-0024 Shipping and Describes response to emergencies and mitigation Marine Wildlife measures for marine mammals during construction X X X Management Plan and operation phases (SMWMP) BAF-PH1-830-P16-0046 Marine Monitoring Describes how monitoring of the marine Plan (MMP) environment will be undertaken at the Project level; X X X focused on key potential Project-related effects on marine water quality, marine sediment quality,

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Espoo Report Mary River Project Environmental Health and Safety Phase 2 Proposal Management

Table 7.1 Overview of Key Environmental Management Documents Relevant to Management of Transboundary Effects

Relevant Transboundary Valued Ecosystem Component

Baffinland Report Title Overview Document No.

Climate Change Climate Migratory and Birds Habitat and Marine Habitat Biota Marine Mammals marine habitat and biota (marine fish habitat and Arctic char health), and marine mammals BAF-PH1-830-P16-0002 Air Quality and Provides guidance on management of air emissions Noise Abatement and noise from construction and operation Management Plan activities, including actions to control airborne X X X particulates and noise hazards and improve management of energy and greenhouse gas emissions. BAF-PH1-830-P16-0027 Terrestrial Provides guidance to protect and limit disturbances Environment to vegetation, birds and terrestrial wildlife from X Mitigation and Project activities. Monitoring Plan

The QIA is also developing an Inuit Stewardship Plan, an Inuit-led Project monitoring and management plan authored and administered by QIA, with input from the Inuit Committee and the Inuit Social Oversight Committee for the Mary River Project, impacted communities, and Baffinland. The Inuit Stewardship Plan is resourced by Baffinland, and implemented by Inuit to monitor activities related to Inuit use of the land and harvesting, and changes in community life, including but not limited to Inuit food sources, food security and food sharing.

7.2 Follow-up and Adaptive Management Baffinland aims to continually improve environmental and social management processes by monitoring and evaluating their effectiveness and implementing strategies and actions to incorporate learnings quickly and proactively. The Adaptive Management Plan for the Project provides an overview of the management mechanisms established to identify where mitigation measures may not sufficiently address potential adverse effects, and to address uncertainty or conditions that may occur during operations that were not anticipated during the planning phase. A key part of Baffinland’s approach to adaptive management is incorporation of community review and feedback, particularly the incorporation of IQ. Monitoring programs to be conducted within the RSA will provide feedback on effects predictions and mitigation effectiveness and alert Baffinland to any previously unidentified risk of transboundary effects.

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Mary River Project Espoo Report Phase 2 Proposal Overall Transboundary Impact

8 OVERALL TRANSBOUNDARY IMPACT

The Phase 2 Proposal is currently undergoing regulatory review by the NIRB. The FEIS Addendum (Baffinland 2018a), including supporting documents, has concluded that most of the adverse effects associated with Phase 2 are localized to the NSA and are not significant. There is some potential for transboundary effects to extend beyond the NSA for birds and marine mammals which migrate outside the NSA, although the transboundary impact of these effects is considered to be low and not significant. Predicted greenhouse gas emissions from Project activities are expected to result in negligible effects on global climate change. Regulatory compliance for the management of ballast water will reduce the risk of aquatic invasive species introduction in international waters, thereby reducing risk of transboundary impacts.

Transboundary impacts of Phase 2 Proposal activities are predicted to be not significant. Through the implementation of mitigation and monitoring measures (and associated adaptive management plans) intended to reduce or eliminate adverse effects on climate change, migratory birds and habitat, marine habitat and biota, and marine mammals at the source (within the NSA), the risk of transboundary impacts occurring is very low and effects are not predicted to be significant.

A major fuel oil spill during shipping activities could potentially result in significant adverse transboundary impacts with respect to migratory birds. However, through diligent Project planning and design, and the implementation of effective mitigation measures, the likelihood of fuel spills would be reduced. Similarly, the implementation of emergency response measures as described in various emergency response plans which have been updated for Phase 2 Proposal activities, would reduce the consequences of adverse effects. Significant transboundary impacts as a result of a Project-related spill are therefore unlikely to occur.

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Mary River Project Espoo Report Phase 2 Proposal References

9 REFERENCES

Amec (Amec Earth & Environmental). 2010. Milne Inlet Spill Trajectory Modelling for the Mary River Project. Final Report. November 2010.

Baffinland (Baffinland Iron Mines Corporation).2012. Final Environmental Impact Statement. February 2012.

Baffinland (Baffinland Iron Mines Corporation).2013. Addendum to Final Environmental Impact Statement. June 2013.

Baffinland (Baffinland Iron Mines Corporation). 2018a. Final Environmental Impact Statement Addendum.

Baffinland (Baffinland Iron Mines Corporation). 2018b. Mary River Project Phase Two Proposal. FEIS Addendum. Technical Supporting Document 27. Cumulative and Transboundary Effects Assessment. Baffinland (Baffinland Iron Mines Corporation). 2018c. Mary River Project Phase Two Proposal. FEIS Addendum. Technical Supporting Document 06. Climate Change Assessment. Baffinland (Baffinland Iron Mines Corporation). 2018d. Mary River Project Phase Two Proposal. FEIS Addendum. Technical Supporting Document 19. Fuel Spill Modelling Report. Prepared by Amec Foster Wheeler. 2016.

Baffinland (Baffinland Iron Mines Corporation). 2019a. Mary River Project Phase Two Proposal. Final Written Comment Responses. October 2019. Baffinland (Baffinland Iron Mines Corporation). 2019b. Food Security Assessment. Prepared by Knight Piésold Ltd. Baffinland (Baffinland Iron Mines Corporation). 2019c. Draft Shipping and Marine Wildlife Management Plan h Baffinland (Baffinland Iron Mines Corporation). 2020. Baffinland Iron Mines 2019 Annual Report to the Nunavut Impact Review Board. 15 May 2020.

EDI (Environmental Dynamics Incorporated). 2018. Mary River Project Phase Two Proposal. FEIS Addendum. Technical Supporting Document 12. Migratory Birds Baseline and Impact Assessment Gérin-Lajoie, José Cuerrier, Alain, Seigwart Collier, Laura, (Eds.) 2016. The Caribou Tastes Different Now. Nunavut Arctic College Media.

Golder Associates Ltd. 2018a. Mary River Project Phase Two Proposal. FEIS Addendum. Technical Supporting Document 18. Ballast Water Dispersion Modelling. Golder Associates Ltd. 2018b. Mary River Project Phase Two Proposal. FEIS Addendum. Technical Supporting Document 21. Risk Assessment for Introduction of Aquatic Invasive Species from Ballast Water Golder Associates Ltd. 2018c. Mary River Project Phase Two Proposal. FEIS Addendum. Technical Supporting Document 24. Marine Mammal Effects Assessment.

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Mary River Project Espoo Report Phase 2 Proposal References

Golder Associates Ltd. 2019a. Ballast Dispersion Modelling. Ballast Water Model Validation. 1663724-154-R- Rev0.

Golder Associates Ltd. 2019b. Technical Memorandum.2019 Marine Mammal Monitoring Programs Preliminary Findings. 15 October 2019.

Golder Associates Ltd. 2019c. Daily Ship Exposure Periods for Narwhal During Should and Open Water Season Relevant to the 135, 120 and 110 Decibel Noise Fields.

Golder Associates Ltd. 2019d. Assessment of Icebreaking Operations during Shipping Shoulder Seasons on Marine Biophysical Valued Ecosystem Components (VECs)

Golder Associates Ltd. 2020a. Technical Memorandum. 2019 Marine Mammal Monitoring Programs – Updated Preliminary Results. 21 February 2020. Golder Associates Ltd. 2020b. Technical Memorandum. Potential Effects of Fuel Spills on Polar Bears Along the Northern Shipping Route. 16 October 2020. Golder Associates Ltd. 2020c. 2019 Marine Environmental Effects Monitoring Program (MEEMP) and Aquatic Invasive Species (AIS) Monitoring Program. Report No. 1663724-197-R-Rev0-24000. 27 August 2020. International Marine Organization (IMO). 2017. International Convention for the Control and Management of Ship’s Ballast Water and Sediments. Jason Prno Consulting. 2017. Technical Supporting Document 27. Inuit Qaujimanituqangit (IQ).

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