April 7, 2014

Northern Ontario’s Ring of Fire far from fading

SAUL CHERNOS

correspondent

It’s been a burning question in mining circles the last few years – when will northwestern Ontario’s Ring of Fire see production?

Time will tell if the 5,000-square-kilometre mineral hot-spot in the James Bay Lowlands holds the kind of promise that has a couple dozen mining companies prospecting for reportedly substantial reserves of chromite, copper, nickel, gold, platinum and zinc.

Despite nearly matching Prince Edward Island in size, the Ring of Fire is lacking the hydro, roads and rail lines mines would need if they’re ever to see the light of day.

The infrastructure deficit hasn’t deterred companies from staking claims, exploring, and negotiating with local First Nations. However, progress has teetered between setbacks and incremental advancements.

Late last year, citing an uncertain timeline and infrastructure concerns, Cleveland, Ohio-based Cliffs Natural Resources put Ring of Fire activities on indefinite hold.

In a statement, Cliffs said it would close its Canadian offices but would continue working with the Government of Ontario, First Nations communities and other interested parties to explore potential solutions. Cliffs also expressed support for the Ontario government’s plan to form a development corporation structure to work on financing and infrastructure.

“We continue to believe in the value of the mineral deposits and the potential of the Ring of Fire region for Northern Ontario,” Bill Boor, Cliffs’ senior vice-president, strategy and business development, said at the time.

In March, at the annual convention of the Prospectors and Developers Association of Canada in Toronto, the Ring of Fire was front-and-centre.

Former Ontario Premier Bob Rae, lead negotiator for the Chiefs of the Matawa Tribal Council, which represents some First Nations in the Ring of Fire, gave a keynote address and expressed optimism about projects going forward. But he warned delegates they must consult and engage properly with Aboriginal groups whose territory might potentially be impacted.

“Over the last several thousand years people have been living in this part of Ontario and they value the land, the water and the resource,” Rae said. “There’s a process that has to be gone through to convince the First Nations and governments that these projects can be carried on without causing permanent and irreversible damage to the environment.”

Rae said Ontario has relied extensively on mining for over 150 years yet First Nations communities have seen no real benefit.

“The answer is really quite simple,” Rae said. “You have to persuade the First Nations that the project is environmentally sustainable, that there will be infrastructure improvements that will benefit them, that there will be jobs and training, that generations of poverty will be overcome as a result of the development, and that there will be permanent improvements in their revenue stream as a result of the profits generated.”

It was early March when Rae reported “good progress” at the bargaining table with former Supreme Court of Canada Justice Frank Iacobucci, who is lead negotiator for the province.

“We are working hard on a framework agreement, and I believe we will have one soon,” Rae said.

Indeed, three weeks later, on March 26, the two sides announced a deal that essentially constitutes a basic understanding that is meant to guide Matawa’s participation in any development-related processes going forward on their land.

The agreement essentially consists of principles meant to guide further talks and negotiations regarding environmental assessment processes, long-term monitoring, social and economic supports, regional infrastructure planning and resource revenue-sharing.

“Signing the Regional Framework Agreement means that these First Nations communities have taken an important first step in moving forward and continuing to work alongside the province to realize the Ring of Fire’s potential,” Ontario Ministry of Northern Development and Mines spokesperson Maya Gorham said in a written response to questions from Daily Commercial News (DCN).

Gorham described the regional process as occurring alongside work the province is doing to establish a Ring of Fire development corporation to support strategic infrastructure in the region. With 30 per cent ownership in Cliffs’ Big Daddy chromite deposit and 80 per cent in a chromium project called Black Horse, Toronto-based KWG Resources has eyed potential transportation options for operating mining facilities and getting product to market.

“We advocated some time ago that the likely best course of action would be to develop something like an inland port authority to build the roads and/or rail,” KWG vice-president Bruce Hodgman told the DCN, explaining that a government body could raise money at very low rates.

Hodgman said a government agency could raise money privately using long-term bonds at low interest rates rather than relying on the tax base.

“There’s enough chrome up there, it’s going to be mined for 100 to 200 years,” Hodgman said. “You can pay back those bonds over a long period of time.”

While Bob Rae represented Matawa First Nations in negotiations, Hodgman said other area First Nations communities, including those belonging to Mushkegowuk Council, also need to be included alongside Matawa in any discussions.

“The Albany and Attawapiskat Rivers flow right through several of those communities, so they’re downstream and have a say,” Hodgman said.

Despite the complexities of negotiations and infrastructure financing, Hodgman expressed confidence.

“When Cliffs pulled out a lot of people felt it was the death knell for the Ring of Fire. But it’s far from that. These projects are so big, these deposits are so overwhelming, that they’re not dependent on any one corporation.”

http://dcnonl.com/article/id59751/--northern-ontariorsquos-ring-of-fire-far-from-fading