Commentators rarely mention nightmarish logistics, polar bears and steel-snapping cold when they confidently predict that as the Arctic warms up, melting sea ice and shorter winters will open up the expanse to exploration.

But the rosy words obscure the reality of working in an icy wasteland that stretches across Russia, Scandinavia, Alaska and Canada. And rather than making life easier, the warming of the Arctic and the thawing of its permafrost could make operating here even more complicated.

A closer look at the far northern Canadian territory of Nunavut, one of the most promising areas for exploration, reveals challenges so huge that the Arctic may well turn out to be a niche market where big firms with a serious tolerance for risk and adversity develop a handful of major deposits.

For all the talk of a bonanza there is just one mine working in Nunavut today - Agnico-Eagle's Meadowbank operation, which has cost a total of $1.5 billion so far. The gold mine, literally in the middle of nowhere, is surrounded by dikes that keep a series of shallow lakes at bay. Temperatures plunge to minus 50 degrees centigrade (minus 58 Fahrenheit) in winter, bringing with it the risk of almost instant frostbite and mechanical failures.

"It's hard to believe we are in the geographic center of Canada, because simple things like parts for an emergency breakdown have to be flown in," said Agnico-Eagle's President Ebe Scherkus. "What the last 16 months has taught us is there's long-term planning and then there's very long-term planning on a site like this."

In March, a fire destroyed the kitchen and forced the firm to evacuate over 300 employees and operate the mine with a skeleton crew. A new multimillion dollar kitchen will arrive later this summer.

The harsh climate closes down many exploration sites from October to March. Polar bears prowl and snowstorms slash visibility. There is little or no sunlight for three months a year in the far north and low winter temperatures mean metal starts to snap, oil thickens and helicopters stop flying.

And if that was not enough, companies will need to work out how to access their sites in warming weather, and how to cope with the gradual thawing of the permafrost, the frozen layer of soil that sits about two meters under the surface.

"We know how to build on permafrost, we know how to build on non-permafrost. What we don't know how to do is build on permafrost that will thaw," said University of Ottawa professor Antoni Lewkowicz, a leading permafrost expert.

In parts of the Canadian and U.S. Arctic, buildings are already starting to collapse and roads crumble as the frozen ground warms up.

Peregrine found a promising series of diamond-bearing kimberlite rock formations near Iqaluit after three summers of collecting up to 30 soil samples a day by helicopter, at the cost of C$1,000 per sample.

"We find a haystack and industry finds the needle," said Linda Richard, the project coordinator. That said, most of the major deposits now under consideration have been known about for decades.

STAGGERING SUMS NEEDED TO START PRODUCTION

Baffinland, owned 70 percent by ArcelorMittal, is proposing to invest C$4.1 billion on a 149 km railway and two ports - not to mention a special fleet of huge ships - to exploit the huge Mary River iron ore deposit on Baffin Island. This is slated to produce 21 million tons of ore a year for 21 years.

"It is inherently the case that operating in the North ... is more expensive and so it's generally the larger organizations that can take on those green field developments," said Baffinland president Tom Paddon.

"They certainly have to be taking climate change into consideration ... It's not a terribly warm place but the potential is that it could become a great deal warmer in the next century," said Lewkowicz.

One solution is to drive piles deep into the frozen layers to support roads, buildings and railways. The other is to install a series of costly thermosiphons, giant special coolers that help keep the ground firm.

"The economics of a mine up here are a lot different than the economics of a mine somewhere else down south," said Bernie MacIsaac, head of Nunavut operations for the federal Aboriginal Affairs and Northern Development ministry.

The warming climate will also hit drilling firms, which produce samples that determine if a mine is built. Permafrost is covered in a layer of soil that can quickly turn to swamp in summer, making it hard to operate tracked vehicles or move around without using helicopters.

"We like things for us to be fairly cold because we want things to freeze ... We want a bit of snow, particularly on ice, because a bit of snow will insulate the ice, but we don't want a lot of snow because then we can't move."

Although snowfall could increase as temperatures rise, Nunavut is currently so dry and cold that the average snow cover is only around 2 feet (0.6 meter) in winter, when frozen lakes and rivers can be turned into ice roads for the heavy trucks that supply the mines.

A warming Arctic could shrink the season and drive up costs. Indeed, one reason given for Jericho's closure in 2008 was the unusually short life of the ice road in 2006, which meant some equipment had to be flown in. The University of California predicts that by 2050, increasing temperatures mean Canada could lose nearly 155,000 square miles (400,000 square km) of land accessible by winter road, an area slightly larger than Germany.

"With the ice melting and thinning and forming fewer months throughout the year, that could cause serious, serious nightmares for exploration in the North," said Benoit Beauchamp, who heads the Arctic Institute of North America at the University of Calgary.

And global warming will not necessarily help shipping. At the top of the world lies a permanent ice cap which is continually trying to force chunks of rock-hard permanent ice down into shipping channels. A large ice plug currently blocks the way but if it were to melt there would be nothing to stop icebergs from moving south and tearing holes into ships.

A more immediate threat is the almost total lack of infrastructure in Nunavut, which has no major ports and only one public road of any length. The departure lounge at Iqaluit's tiny airport is basically a large room and when three flights leave at the same time, as they do most afternoons, the result is mildly chaotic.

WANTED: PORTS, ROADS AND AIRPORTS

After 17 years of negotiations, a draft might be ready later this year. Things move slowly in the North.

"The upfront capital costs of working in Nunavut for a mining company are very, very high," said Chris Hanks of Newmont. "Are those agreements going to make or break projects? Probably not. But do they figure into the bigger range of economics that do make or break projects? Yes."

The one area of Nunavut known to contain energy reserves is in and around the ice-clogged waters of Ellef Rignes island - a slab of rock in the far north with the worst weather in Canada.

"It's a terrible place to get to ... It's a bad location; it's just a really difficult place to work," said Keith Dewing, who leads a team of government scientists studying where the most promising energy reserves might be.

Even if oil were discovered in large quantities, it might never be extracted. A spill the size of the Gulf of Mexico disaster would be far tougher to handle, given the lack of infrastructure, the weather and the impact on wildlife which the Inuit rely on.

The Nunavut government, which is keen to develop the economy to help ease serious social problems among the Inuit, seems almost bemused by commentators linking climate change to a surge in mining activity.

"Most of the word that's out there is from (people) who have never visited Canada, (they) say that 'The ice is melting, the ice is gone'. Nothing is going to happen for many years yet ... I've got to say we're quite happy with what's happening now," said Peter Taptuna, minister for economic development.

(All figures U.S. dollars unless otherwise indicated)