December 6, 2019

Kaviq Kaluraq,
Acting Chairperson
Nunavut Impact Review Board
PO Box 1360
Cambridge Bay, NU
X0B 0C0

and to

Sharon Ehaloak
Executive Director
Nunavut Planning Commission
P.O. Box 1797
Iqaluit, Nunavut
X0A 0H0

Request for Further Modification of Conditions 179(a) and 179(b) of Mary River Project Certificate
No. 005

Dear Acting Chairperson Kaluraq and Ms. Ehaloak:

Baffinland Iron Mines Corporation (Baffinland) is writing to request that the Nunavut Impact Review
Board (NIRB or the Board) give consideration to further modification of Conditions 179(a) and 179(b) of
Mary River Project Certificate No. 005 (the Extension Request to the Production Increase Proposal or
the Extension Request), which currently reads as follows:

179(a) Until December 31, 2019, the total volume of ore shipped via Milne Inlet may exceed 4.2
million tonnes per year, but must not exceed 6.0 million tonnes in any calendar year. After
December 31, 2019, the maximum total volume of ore shipped via Milne Inlet in a calendar year
returns to 4.2 million tonnes per year, unless this condition has been further modified under
section 112 of the Act.

179(b) Until December 31, 2019, the total volume of ore transported by truck on the Milne Inlet
Tote Road may exceed 4.2 million tonnes per year, but must not exceed 6.0 million tonnes in
any calendar year. After December 31, 2019, the maximum total volume of ore transported by
truck on the Milne Inlet Tote Road in a calendar year returns to 4.2 million tonnes per year,
unless this condition has been further modified under section 112 of the Act.

2275 Upper Middle Road East, Suite 300 | Oakville, ON, Canada L6H 0C3
Main: 416.364.8820 | Fax: 416.364.0193 | www.baffinland.com
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Note that the wording of both Condition 179(a) and Condition 179(b) specifically indicate that they may
be "further modified" under section 112 of the Nunavut Planning and Project Assessment Act (NuPPAA).
For the reasons set out in this letter, Baffinland requests that NIRB give consideration to extending the
current permitted trucking and shipping levels at the Mary River Mine for one further year, until
December 31, 2020.

As the Extension Request does not involve any footprint changes or changes to the status quo,
Baffinland's understanding is that a further conformity determination from the Nunavut Planning
Commission (NPC) will not be required in respect of the Extension Request, however this understanding
will be confirmed with NPC directly.

1. Description of the Extension Request

Section 112 of NuPPAA reads, in part, as follows:

112 (1) The Board may, on its own initiative or at the request of the designated Inuit
organization, the proponent or any interested person, reconsider the terms and conditions set
out in a project certificate that it has issued if

[…]

(b) the circumstances relating to the project are significantly different from those
anticipated at the time the certificate was issued; or

[…]

On September 30, 2018, the Minister of Intergovernmental Affairs, Northern Affairs and Internal Trade
and the Minister of Crown-Indigenous Relations directed NIRB to amend Project Certificate No. 005 to
increase its permitted trucking and shipping operations from 4.2 million tonnes per year to 6 million
tonnes per year until December 31, 2019. Baffinland’s understanding is consistent with that provided in
the Ministers letter to the NIRB, which is that the expiry date was intended to allow sufficient time for
Baffinland’s Phase 2 Development Proposal process (whereby Baffinland is requesting approval to
construct a railroad and increase shipping volumes) to be completed.

It is now clear that the Phase 2 Development Proposal process will extend beyond December 31, 2019.
Therefore, Baffinland submits that the circumstances relating to the Mary River Project are different
from those anticipated at the time the amended Conditions 179(a) and 179(b) were issued by NIRB in
October 2018. On that basis, Baffinland requests that NIRB rely on section 112(1)(b) of NuPPAA to
consider further modifying Conditions 179(a) and 179(b) of Project Certificate No. 005 as follows:

179(a) Until December 31, 201920, the total volume of ore shipped via Milne Inlet may exceed
4.2 million tonnes per year, but must not exceed 6.0 million tonnes in any calendar year. After
December 31, 201920, the maximum total volume of ore shipped via Milne Inlet in a calendar
year returns to 4.2 million tonnes per year, unless this condition has been further modified
under section 112 of the Act otherwise directed.

2275 Upper Middle Road East, Suite 300 | Oakville, ON, Canada L6H 0C3
Main: 416.364.8820 | Fax: 416.364.0193 | www.baffinland.com
 3

179(b) Until December 31, 201920, the total volume of ore transported by truck on the Milne
Inlet Tote Road may exceed 4.2 million tonnes per year, but must not exceed 6.0 million tonnes
in any calendar year. After December 31, 201920, the maximum total volume of ore transported
by truck on the Milne Inlet Tote Road in a calendar year returns to 4.2 million tonnes per year,
unless this condition has been further modified under section 112 of the Act.otherwise
directed.

As set out by Baffinland in detail during the Phase 2 Development Proposal public hearings, extending
the 6 million tonne trucking and shipping levels alone is not sufficient to make the Mary River Project
financially viable in the medium and longer terms. However, it remains as true now as it was in October
2018 that a 4.2 million tonne operation is simply not financially viable for the Mary River Project.

The attached decision of the responsible Ministers dated September 30, 2018, sets out the relevant
socioeconomic considerations and mitigation efforts the Ministers relied on in making their
determinations in 2018 and in particular:

 the need to take into account the interest of workers, and the socio-economic impacts that
annual stoppages in mining operations would have once Baffinland reaches the 4.2 mtpa limit;
and
 the long-term viability of the Mary River Mine, and concerns that the economic viability of the
Project depends on the Production Increase Proposal.

Baffinland submits that those same factors provide support for granting the Extension Request.

Baffinland requires an expeditious review of the Extension Request by NIRB and by the responsible
Minister in order to provide certainty for operational planning for the 2020 year, and requests that NIRB
provide its recommendation to the responsible Minister on the Extension Request on or before February
28, 2020. Baffinland also requests that all interested parties support the expedited consideration of the
Extension Request. This timing is necessary in order to allow Baffinland sufficient time to contract
vessels for the 2020 shipping season.

2. Summary of Baffinland Meetings with North Baffin Hamlets Regarding the Extension Request

In advance of filing this application with NIRB, Baffinland met with North Baffin community
representatives during the week of November 25, 2019 to discuss the Extension Request and other
matters. During those discussions and in subsequent telephone conversations, community
representatives have emphasized that they view the delay in the Phase 2 Development Proposal process
as an opportunity for Baffinland to work with the communities and to answer questions raised by them.
Baffinland agrees and is committed to this work, as outlined in detail in its submission to NIRB on
November 29, 2019 in respect of Nunavut Tunngavik Incorporated’s (NTI) Motion to Adjourn.

Attached are letters provided to Baffinland and signed by the Mayors of Arctic Bay, Clyde River, Hall
Beach, Igloolik and Pond Inlet indicating their support for an extension of the 6 million tonnes until a
decision is made with respect to the Phase 2 Development proposal, and setting out the basis of that
support.

2275 Upper Middle Road East, Suite 300 | Oakville, ON, Canada L6H 0C3
Main: 416.364.8820 | Fax: 416.364.0193 | www.baffinland.com
 4

Representatives of the North Baffin communities have emphasized their concerns regarding the recent
contractor demobilization at the Mary River Mine, which has affected 586 individuals and their families,
96 of whom are Inuit. Baffinland has been working closely with its contractors and governments to help
find the affected workers alternative employment and to date has been successful in reinstating some of
the Inuit workers. Baffinland confirms that it will continue to support those workers and their families
affected by the demobilization of contractors to the extent possible under the present circumstances
and wishes to emphasize that as of December 2, 2019 the number of Inuit workers impacted by the
demobilization of contractors has been reduced from 96 to 48 individuals. Moving forward, Baffinland
will continue to prioritize Inuit employment at the Mary River Mine and commits not to lay off its Inuit
employees while it maintains production at 6 million tonnes per year during the extension period.
Should Phase 2 be approved, Baffinland is further committed to continue the upward trend in the
number of Inuit employed at the Mary River Mine, as has been experienced steadily since 2017.

Baffinland is grateful to the communities of Arctic Bay, Clyde River, Hall Beach, Igloolik and Pond Inlet
for the careful consideration they have given to the Extension Request. Baffinland is also appreciative of
the advice shared by community representatives on working with the communities to address the
concerns expressed during the Phase 2 Development Proposal process public hearings.

3. NIRB Process and Procedure

NIRB has considerable discretion as to the process for conducting a reconsideration under Section 112
of NuPPAA. Under Section 112(4) of NuPPAA:

The Board may conduct its reconsideration of the terms and conditions in the manner that it
considers appropriate in the circumstances.

As outlined in NIRB’s Proponent’s Guide, the flexibility and discretion granted to NIRB to determine the
appropriate process for reconsideration of Project certificate terms and conditions “reflects the scale
and scope of the changes requested” and “may vary considerably as previously approved projects are
developed, operated, decommissioned, and reclaimed.”1

Baffinland supports this tailored approach, and submits that the NIRB process for considering Section
112 applications must reflect the scale and scope of the changes requested. In this case, Baffinland
believes that a streamlined approach is appropriate, taking into account all of the circumstances. In
particular, Baffinland is not proposing through the Extension Request to increase shipping and trucking
beyond levels already carried out during 2018 and 2019, and is not seeking an indefinite extension.
Instead, Baffinland is requesting a limited extension to permit it to maintain current approved
production levels until the Phase 2 Development Proposal process is complete, as originally intended by
the responsible Ministers in 2018.

In its submissions on the NTI Motion to Adjourn, the QIA recommended that the time required to review
any concurrent application to amend Project Certificate No. 005 should be added to any timeline for the
Phase 2 Development Proposal process. While Baffinland agrees that NIRB should give consideration to
coordinating procedural steps for both the Extension Request and the Phase 2 Development proposal,

1
Nunavut Impact Review Board, “Proponent’s Guide” (December 2018), p. 70.

2275 Upper Middle Road East, Suite 300 | Oakville, ON, Canada L6H 0C3
Main: 416.364.8820 | Fax: 416.364.0193 | www.baffinland.com
 5

Baffinland strongly disagrees that these applications should proceed in sequence rather than in parallel.
Neither the Nunavut Agreement, NIRB Rules of Procedure nor NuPPAA prevent NIRB from considering
these requests in parallel.

Baffinland submits that the circumstances surrounding the Extension Request are very different from
the circumstances surrounding the original Production Increase Proposal. For instance, the original
Production Increase Proposal requested a permanent increase to Baffinland’s trucking and shipping
limits while the current request is for a limited extension that is consistent with the intent of the
approval granted by the responsible Ministers in 2018. In addition, a significant amount of technical
information has been submitted to NIRB and reviewed by intervenors since the original Production
Increase Proposal through the Phase 2 Proposal review, and the 2018 Annual Monitoring Report. In their
letter to the NIRB dated September 30, 2018, the responsible Ministers emphasized the importance of
considering the impacts of the production increase as part of the Phase 2 Development Proposal
process. Delaying the Phase 2 Development Proposal process to again consider the 6 million tonne
expansion would be inconsistent the with intent of the Ministers’ letter.

As Baffinland emphasized in its submissions to NIRB on November 29, 2019, the recommencement of
the hearings on the Phase 2 Development Proposal process on a timely basis is important to avoid
profound and sustained negative impacts on Baffinland, its employees and the North Baffin region.

4. Information Requirements for the Extension Request

Baffinland submits that NIRB’s technical information requirements should be appropriately scaled to the
technical issues and level of assessment required in relation to the Extension Request, given the
previous Production Increase Proposal process and current stage of the Phase 2 Development Proposal
process.

Baffinland anticipates NIRB's information requirements would take into consideration the 2018
monitoring results as well as the significant volume of technical materials that have been provided to
NIRB in respect of the Phase 2 Development Proposal to date. Baffinland notes that this information
includes the preliminary summary of 2019 marine monitoring results prepared by Golder Associates,
which was provided to NIRB by Baffinland on October 16, 2019. This approach is consistent with Section
146(2) of NuPPAA, which states: “Any person or body exercising powers or performing duties or
functions under this Part in relation to the assessment of the modifying project must consider, and may
rely on, any assessment carried out under this Part in relation to the original project."

For all of these reasons, the information package to support the Extension Request should therefore be
limited in scope to reference to existing relevant technical information which has already been subject
to public review in other NIRB-administered processes related to the Mary River Mine. No new technical
information should be required. Baffinland also anticipates that NIRB will ask Baffinland to provide
further information on how they have addressed the concerns outlined by NIRB in its Reconsideration
Report and Recommendations on the Production Increase Proposal dated August 31, 2018 and to
provide an update on the current status of the items outlined in the Minister's letter of September 30,
2018 (such as the audit referenced therein).

2275 Upper Middle Road East, Suite 300 | Oakville, ON, Canada L6H 0C3
Main: 416.364.8820 | Fax: 416.364.0193 | www.baffinland.com
 6

5. Summary of Potential Procedural Steps and Timeline for Extension Request

Baffinland recognizes and respects that NIRB will establish its own procedures with respect to the
Extension Request, but in light of the considerations outlined above, Baffinland offers the following
suggestions for NIRB's consideration:

 Baffinland to provide an information package to support the Extension Request on or before

December 30, 2019 (narrowly scoped as described in Section 4 above - recognizing NIRB staff
may not be available to circulate this package to the distribution list on December 30 or
December 31, Baffinland could copy any parties who express interest on its submission to NIRB);

 NIRB to circulate the information package for public comment (Baffinland is of the view that
only a limited public comment period is necessary given that no new technical information
should be required and given the limited temporal scope of the Extension Request);

 Baffinland to respond in writing to any public comments within 7 days; and

 NIRB to issue its Report and Recommendation to Minister on the Extension Request on or
before February 28, 2020 (Baffinland recognizes that this likely would result in a decision making
period that would be shorter than the 45 day period referenced under NuPPAA, but requests
that the NIRB give consideration to an expedited decision making timeline in the circumstances).

Baffinland wishes to thank NIRB and its staff for its consideration of this Extension Request, and looks
forward to receiving direction on next steps. Baffinland also wishes to thank the multitude of individuals
and organizations that have expressed their support, in public and in private, for the Mary River Project
since the conclusion of the public hearings in November.

Sincerely,

Megan Lord-Hoyle
Vice President, Sustainable Development
Baffinland Iron Mines Corporation

cc. The Honourable Dan Vandal, Minister of Northern Affairs

PJ Ageeagok, President Qikiqtani Inuit Association
Aluki Kotierk, President Nunavut Tunngavik Incorporated
Moses Oyukuluk, Mayor of Arctic Bay
Jerry Natanine, Mayor of Clyde River
Jayko Simonie, Mayor of Hall Beach
Merlyn Recinos, Mayor of Igloolik
Joshua Arreak, Mayor of Pond Inlet

2275 Upper Middle Road East, Suite 300 | Oakville, ON, Canada L6H 0C3
Main: 416.364.8820 | Fax: 416.364.0193 | www.baffinland.com
 7

Ryan Barry, Executive Director, Nunavut Impact Review Board

Steve Pinksen, Government of Nunavut
David Rochette, Crown-Indigenous Relations and Northern Affairs Canada
Udlu Hanson, Vice President, Community Strategic Development, Baffinland
Lou Kamermans, Director of Sustainable Development, Baffinland

Appendices:

Appendix 1 – Letter from Minister of Intergovernmental Affairs, Northern Affairs and Internal Trade and
the Minister of Crown-Indigenous Relations to Nunavut Impact Review Board dated September 30, 2019

Appendix 2 – Letters from Mayor of Arctic Bay, Mayor of Clyde River, Mayor of Hall Beach, Mayor of
Igloolik and Mayor of Pond Inlet to Baffinland dated November 22, 2019

2275 Upper Middle Road East, Suite 300 | Oakville, ON, Canada L6H 0C3
Main: 416.364.8820 | Fax: 416.364.0193 | www.baffinland.com
 Appendix 1

Letter from Minister of Intergovernmental Affairs, Northern Affairs and Internal Trade and the
Minister of Crown-Indigenous Relations to Nunavut Impact Review Board dated September 30, 2019
 Appendix 2

Letters from Mayor of Arctic Bay, Mayor of Clyde River, Mayor of Hall Beach, Mayor of Igloolik and
Mayor of Pond Inlet to Baffinland dated November 22, 2019