Thanks to all of you. I guess I'm going to have to move quickly through this.
To quickly touch on my background, I'm from a technology background. I chaired the OMET program of Ontario, which was actually the group that put the first funds into the Gedex program, so I'm familiar with it. I also was involved in some of the first hyperspectral mapping of Canada's north, and I brought that technology.... At that time, Noranda was a leader. Unfortunately, today we don't have a Noranda.
I'm going to quickly tell you a bit about who we are. Our company is the other iron ore company, the one you don't know about. We're located on the east coast of the Melville Peninsula. We are working to complete a feasibility study with our Chinese partner. I just came back from China, so excuse me if I'm a little punch-drunk from lack of sleep.
We bring together a very experienced team. People will know who Jim Excell is. He's the person from BHP who built and ran the Ekati mine. Robert Collette is also a very familiar name in here. We brought in various seasoned people from the political and the corporate side. Robert Telewiak, who actually spent his pre-retirement years with Falconbridge, was involved in permitting the Raglan Operation, as was Bernie Swarbrick, who is here with me today and is heading our feasibility program.
Quickly, I do want to talk about what is pressing us all, which is, why invest? We have to think of Canada's north as a jurisdictional environment. You're competing internationally for funds. Exploration dollars are going everywhere now.
I think I'm just going to summarize the motivating risks and decisions made by corporations and the jurisdictional risk.
Canada is obviously one of the best places in the world to invest. I think there's not much we have to worry about on that front. We have quality assets. Canada is a major mining country. We know that there's a lot of opportunity here, but in the far north, we lack a lot of detailed information. Comments were made earlier with respect to continued mapping. Mapping is the lifeblood of the exploration industry.
As for skilled labour, Canada has the best miners in the world, but there is a significant issue with respect to our northern communities. Much more training has to be done, actually, to bring more of our indigenous peoples, the Inuit, into the workforce so that there is more participation and the wealth generation that comes from mining.
I will talk a little about the regulatory framework. We have issues with respect to the permitting processes in the north, obviously, which are not aligned with the logic of the exploration processes, as was stated earlier. We have a four-month season, and often if we come up with a target, it takes over four months to get a permit to put a drill on the site. That adds to our costs. Time delays are a serious impediment. That's an area in which the government can make changes.
In terms of being cost competitive, what I really want to talk about at the end of this--and I'm probably going to jump quickly to the end--is the fact that you can't change where you are located. There is a lack of infrastructure and the power costs are high. At the end, I'm going to talk a little bit about a solution to high power costs.
Again, I mentioned jurisdictional risk. Everything here is generally pretty good, so be careful when you are changing policy. Canada is a premier investment place, but we see also, as mentioned earlier, that the federal government does not have jurisdiction over the mineral resources in the north; it's a right of the provinces. The provinces add another layer of incentives to help the industry.
We need to review policy from government, which will level the playing field. As we said earlier, there are incentive programs in Quebec. The reason it's the number one jurisdiction in the world is that they have additional incentives to ensure that they have a healthy mining industry. We lack that in the north and, given the much higher operating costs to be there, you're going to need to look at how you can attract investment when we go through cycles in the economy. This will be the first place people walk away from.
This is to illustrate the fact that Canada is the major source of exploration dollars, but most of what you will see will actually probably end up in the lower provinces. Quebec and Ontario are the two number one attractions for most of that money. Nunavut has seen a fair amount of increase of late, but we're forgetting that their operating costs are four to ten times higher, so the effectiveness of that dollar is much reduced.
Again, as I said, mapping programs are essential. We need to keep investing in our mapping programs and ensure that we have continued investment in the north.
I've mentioned skilled labour.
On the regulatory framework, yes, we do have problems. As I said, we're finding more and more delays. Our permitting is very convoluted, a lot of because we have a lack of capacity in the north. Again, in Nunavut, people are catching up to the south. There are just not the numbers of skilled people. Money needs to be invested to help them and to bring them up, because that's really slowing down our process. That problem is exacerbated when you get to a mature project and you're looking at the permitting issues.
One of the things that we also see in the regulatory framework is that we have to look at shipping issues. Right now, we're seeing that ArcelorMittal, in its Baffinland project, is dealing with this issue head on, but every project is going to be eventually addressing the same problem.
What we're seeing is that every ship is looked at as an incremental issue on an environmental basis, where that just becomes a bottleneck and fails to address, really, a larger vision. The government is going to need to stand back and come up with a national strategy as to how it's going to allow and deal with shipping in the north. If you're going to look at increased development, there will be increased shipping.
Right now, the burden is falling on individual companies to tackle each project literally a ship at a time, and that's going to shut development down very quickly. If the industry sees that this is going to be a barrier, again, it will be a barrier to future investment.
On cost competitiveness, we can't change the fact that there are issues, but don't let the framework make it more expensive. They're already streamlining the permit process and hopefully we don't have any additional barriers currently as to location.
One thing I'd like to bring up is that we're seeing that on the power issue. It is a huge impediment. I'd like to point out how we're seeing the high costs being generated in power. It's not just the industry that's facing it. So are the communities themselves.
I have a slide here with me that lists all the diesel plants that are sitting in Nunavut. It's hard to see it on the slide, but in your handout you'll see that it's a very aging infrastructure. Based on the report from QEC, they estimate the capital replacements at about $15 million per station. You'll see that they're all 30 years old or more, though some are younger. It has cost them over $100 million a year to operate. Also, you can look at the kilowatt rates that are being charged in the communities. Compare that to what people are howling about in Ontario. Essentially, these are tremendous deterrents to investment.
We need to have a solution. We can't keep investing. There was at one point a discussion that we might go nuclear, but I think the reality is that it's not practical, given the scale and the size of the number of smaller communities. So we've been looking at an opportunity for government and industry to collaborate on the LNG solution. There are power barges existing today, of various scopes and size, and most of them are larger than what would be required by the communities. The technology is in place. What is not in place are the delivery and storage facilities for small-scale operations.
LNG has 40% less CO2 emissions and almost 1,000 times less in noxious gases, so this is a relatively clean solution to our energy requirements in the north. There is a surplus in the emerging technology of natural gas, so we will have a lower-cost power supply to the north.
Also, there's an opportunity to partner. We know that Iqaluit is facing its own brownouts and challenges to meet its power needs. We will be looking at the same issues. There's an opportunity for public-private partnership in dealing with an LNG solution for the north and looking not only at how to solve the immediate problems, but at how to micro-scale these operations to solve it.
These are coastal communities, so barging and these types of solutions could be out of what we call our beta sites and would lead to solutions that not only could be applied to Canada's north, but would lead to a business that could be sold around the world. We actually did our white paper on this and realized that there was a group looking at Indonesia that had 78 barge-based power plant opportunities at 50 megawatts apiece. That's about an $8-billion business.
Look around the world, at the Philippines and all these communities and Canada's north and its coastal communities, and you can see this is not only a real opportunity to help reduce the barrier of high power costs to the north, but a business opportunity in itself to place Canadians and Canadian industry on the map of delivering power solutions to remote communities.
Lastly, as I went through the list of what I said you saw on the first slide, I think Canada can reach this kind of scoreboard. We can improve our training, obviously, for our aboriginal communities, in making sure we have a local workforce. We can streamline the regulatory process. We can keep investing in our quality assets and mapping. We can solve the shipping issue; literally, it's a political issue.
Again, we can't necessarily change the fact that it's the Arctic. We can't change the fact that there's ice there and it's remote, but there is an opportunity to deal with the power issue. It could be a game changer for all of us, not just the communities, and it could help lower the costs, that current barrier, for resource development in the north, not just for mining but for oil and gas as well. It has a green component that comes with it as well.
As I said, we currently are seeing barriers rise with respect to skilled labour and with respect to the regulatory framework, which are making it an even greater impediment to invest in the north, and money will flow to where it can recoup returns. We can't have eight- and ten-year permitting processes for a mine. That's what we're headed, given the bottlenecks that currently are forming.
