COMPANY DESCRIPTION

Baffinland Iron Mines Corporation (“Baffinland” or “the Company”) is a privately held Canadian mining company jointly owned by The Energy and Minerals Group (majority shareholder) and ArcelorMittal.

The Company owns and operates the Mary River Mine, which produces the highest grade of direct shipping iron ore in the world. Mary River is located on Baffin Island approximately 160 kilometres southwest of the nearest community of Pond Inlet (Mittimatalik), in the Qikiqtani region of Nunavut, Canada.

Our head office is located in Oakville, Ontario, and our northern headquarters is located in Iqaluit, Nunavut. Along with our office in Iqaluit, we are also heavily invested in five North Baffin communities including: Arctic Bay, Clyde River, Sanirajak, Igloolik and Pond Inlet.

Unique to Baffinland’s operations is that the high-grade ore can be shipped directly to markets following crushing and screening – no concentrating or processing is needed, and therefore no tailings and very little waste rock is produced. Iron ore, in the form of lump and fines, is then shipped to international markets during a short shipping season (~July to October, depending on ice conditions). For further information, visit www.baffinland.com.

Baffinland’s Mission, Vision, and Values were developed with the Government of Nunavut’s eight Inuit Societal Values in mind, and include:

Mission: “To become the lowest-cost producer of high-grade iron ore in the world.”

Vision: “To safely and efficiently identify and develop resources within Baffin Island, unlocking their wealth-generating potential.”

Values:

Health and Safety – Safety as a Value: When safety is a personal value, people naturally choose to make the safe choice. They even use hearing protection and safety glasses at home. Employers who have safety as a value make their workplace safe because they want to, not because of government regulation. Employees work safely because they want to, not because it is a company rule. In this environment, companies go above and beyond regulations to protect their people.

Integrity – Do What is Right, Not What is Easy: Integrity is often defined as doing the right thing even when no one else is around. It is the ability to act with honesty, be consistent, and ethical in whatever it is we are doing. It’s about being accountable, transparent and building trust through communications.

Engage and Develop our People: An organization where good work is recognized and rewarded. All employees are seen and treated as valued partners. Baffinland will invest in our employees’ success and growth through providing tools, training and support needed to unleash their potential. Baffinland will endeavour to become the employer of choice for Inuit in Nunavut.

Respect for All: We will respect and abide by Inuit Societal Values in the workplace and as a manner of doing business. We will strive to provide a healthy and safe workplace, free from physical or psychological bullying, harassment and violence. Violations of respect will be investigated and if substantiated will be dealt with expeditiously. Multiculturalism will be viewed as a strength and promoted. Consideration for people will be first and foremost in all interactions.

Environmental Stewardship: Respect the air, land, water and wildlife as we thoughtfully put to good use the earth’s resources. Always remember that we are guests on this land and treat it respectfully. We will develop it responsibly and be good stewards of the land in concert with Inuit.

Pursue Performance Excellence: We are relentless in challenging ourselves and others to achieve high performance and create lasting socio-economic impacts in all that we do. We focus on improving every day and delivering on commitments. Innovation is seen as a key mechanism to achieve this outcome. Rigor in planning and thoughtful execution is a key strength. Teamwork is necessary for desired outcomes.

TSM PERFORMANCE ASSESSMENT

Baffinland’s overall approach to responsible operations and its core values align well with the overarching expectations of Towards Sustainable Mining. Working closely with the North Baffin communities and other stakeholders, Baffinland is committed to operating the Mary River Mine in an environmentally and socially responsible manner.

Baffinland is focused on avoiding and minimizing the environmental effects of its operations. Expansive environmental/socio-economic monitoring programs, management plans, policies and procedures are deployed to safeguard the environment, based on a combination of scientific and traditional Inuit knowledge also known as Inuit Qaujimmajatuqangit (IQ).

Baffinland’s commenced operations in 2015, making 2022 the eight year that the Company has mined and shipped iron ore through Milne Port. Six million tonnes per annum transportation limits have been permitted along the Northern Transportation corridor in five of the last 8 years the Project has been in operation to date. In 2023, Baffinland will be seeking approval from the Nunavut Impact Review Board for an amendment to Project Certificate No. 005 to allow for the continued transportation of iron ore via the Tote Road and marine shipping along the Northern Shipping Route at nominal levels previously approved from 2018 to 2022.

Due to elaborate environmental and socio-economic expectations associated with operating a mine in Nunavut, Baffinland’s primary drivers for achieving sustainability-related operational excellence is to achieve full compliance with all of its commitments including: the terms and conditions associated with the Nunavut Impact Review Board (“NIRB”) Project Certificate No. 005, Nunavut Water Board (“NWB”)-issued water license(s), and the Commercial Lease between Baffinland and the Qikiqtani Inuit Association (“QIA”), in addition to meeting the requirements defined in the Mary River Inuit Impact and Benefit Agreement between Baffinland and the QIA, along with meeting all other federal and territorial regulations.

Accordingly, Baffinland has consistently performed well on most of the protocols applicable to its operations (excludes Tailings Management Protocol reporting since no tailings are produced at the Mary River Mine), with most indicator scores ranging between “A” and “AAA”, including for the new Water Stewardship protocol.

Baffinland has performed less well on the Energy Use and GHG Emissions Management Protocol, with scores ranging from “B” to “A”. There are challenges to operating in a remote, harsh arctic environment where there is no opportunity to connect to an existing power grid. The mine thus relies on diesel for power generation and for operation of mobile equipment. However, Baffinland is aware that improvements need to be made in this space. Accordingly, the Company has been working with an external consultancy to refine and elaborate its existing Climate Change Strategy (February 2019) to ensure it is strategic, implementable/achievable, and relevant in terms of the value it will bring to expanding operations since September 2019. A key focus has included considerations for setting priorities for greenhouse gas emissions management, anticipated impacts of climate change on the mine and how the Company will work with Nunavummiut to support increased community resilience and adaptation in the North. Proposed draft updates to the existing strategy have also been made in consideration of the new TSM Climate Change protocol. In order to further revise the strategy, external engagements with Inuit and other stakeholders on the latest draft were completed throughout 2021 to seek feedback and identify potential opportunities for collaboration. Baffinland is seeking  to finalize its strategy and supporting action plans in 2023 and, accordingly, expects to achieve better performance in order to meet a minimum of “A” across all indicators in future reporting years.

TSM EXTERNAL VERIFICATION

Baffinland’s first external verification of 2019 TSM self-assessment results was completed in late 2020/early 2021. The third-party verifier indicated that Baffinland was organized for the verification process, allowing for the verifier to clearly identify how the Company embeds TSM into its operations. The verifier confirmed that the many sustainability programs developed by the Company were established to meet the strict regulatory regime of operating a mine in Nunavut, which in so doing, underpins the strong TSM performance in “Biodiversity Conservation Management” and “Aboriginal and Community Outreach” protocols. However, there is the recognition that as a relatively young operator and implementer of TSM that some ongoing awareness of TSM at all levels of the Company can be further enhanced to demonstrate how TSM can support sustainability initiatives and provide even greater business value to the Company.

POST-VERIFICATION REVIEW

Baffinland was selected to undergo its very first Post-Verification Review (“PVR”) by the Communities of Interest (“COI”) Panel in 2021. Four main topics of interest were selected by the COI Panel for deeper discussions to engage on during the PVR dialogue session, including:

• Aboriginal and Community Outreach
• Energy and GHGs
• Biodiversity; and
• Health and Safety

Overall, Baffinland viewed both the external verification and post-verification review processes as very informative, and the lessons learned will help to better inform improvements that the Company will seek to accomplish in the coming year(s) to further drive performance.