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Ottawa has turned down Baffinland Iron Mines Corp.’s application to increase its iron ore output in Nunavut, citing environmental concerns, putting an end to a multiyear conflict that sparked a national debate about responsible resource development in Canada.

Oakville, Ont.-based Baffinland had hoped to double its production of iron ore at its Baffin Island mine in Nunavut to 12 million tonnes a year, from six million tonnes. It also planned to build a railway that would transport ore from the Mary River mine in the Qikiqtani region of North Baffin to Milne Port, about 100 kilometers away. The company said that getting the go ahead on the expansion was key to it remaining economically viable.

On Wednesday, Federal Minister of Northern Affairs Dan Vandal released his long-awaited decision on whether to allow the expansion.

Mr. Vandal wrote in a release that the expansion has the potential to cause “significant adverse eco-systemic effects” on marine mammals, fish, caribou, terrestrial wildlife, vegetation and freshwater. He raised concerns about the “socio-economic effects,” of allowing the expansion on Inuit harvesting, culture, land use and food security in Nunavut. The damaging impact of the mine can’t be adequately prevented, mitigated, or managed under Baffinland’s proposed remedies, he added.

Opinion: The Baffinland saga highlights the precarious balance between the environment and development in Nunavut

Over four years of hearings on the expansion, significant environmental concerns were voiced by stakeholders about the existing operation which went into production in 2014.

Nunavut Tunngavik Inc., or NTI, the Inuit organization charged with protecting the land rights of the Inuit, told The Globe and Mail last year, that iron ore dust kicked up by giant mining trucks had contaminated ice on seal hunting grounds and turned rabbits pink. NTI also said the Arctic char population has plummeted in the years since mining began. Last year, a group of hunters travelled by snowmobile for two days in the dead of winter to stage a blockade at the mine site.

In May, the Nunavut Impact Review Board, or NIRB came out against the expansion, saying it had the potential to result in “significant adverse ecosystemic effects on marine mammals and fish, caribou and other terrestrial wildlife.”

Baffinland is owned by U.S. private equity group The Energy & Minerals Group and giant Luxembourg-based steel producer ArcelorMittal.

The mining company is an important contributor to the territorial economy, accounting for about 23 per cent of GDP. It is also the biggest private-sector employer in Nunavut.

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