Natural Resources Minister Greg Rickford says Ring of Fire oversight body needs overhaul

TORONTO • The Ontario government wants Ottawa to pony up $1 billion for the massive “Ring of Fire” mineral belt, but the federal natural resources minister is warning that key structural challenges still need to be overcome.

Foremost among these is the fact Ontario has stacked the four board seats of the Ring of Fire’s development corporation with nothing but provincial bureaucrats. They are responsible for overseeing infrastructure development in the region.

“We’ve got a problem with that,” Greg Rickford said in an interview. “That’s not a responsible way to deal with taxpayers’ money.”

The Ring of Fire, named after the famous Johnny Cash song, is a vast but very remote mineral belt located in Ontario’s James Bay Lowlands. The region is thought to hold about $60-billion worth of metals, but the federal and provincial governments need to overcome enormous infrastructure challenges to draw investment from the mining sector, especially in an environment of falling commodity prices.

Queen’s Park committed $1 billion to building infrastructure, and has waged a very public campaign asking Ottawa to match it through the federal Building Canada infrastructure fund.

“Your commitment to providing matching federal funding is key to strengthening investor confidence for development of the [Ring],” Ontario mining minister Michael Gravelle said last week in a letter to Mr. Rickford.

But Mr. Rickford, who hails from Northern Ontario, said the development corporation should be overhauled so that other parties are more directly involved. He noted that Ottawa was never consulted on it and has no idea where it would be involved in the decision-making, and First Nations have also expressed concern about their lack of involvement.

The Ontario government has said it plans to broaden the board over time to include other partners, but has not provided specifics.

Mr. Rickford also pointed to two other ongoing concerns the federal government has about the Ring of Fire: the lack of a firm development agreement with First Nations, and a ruling from Ontario’s Mining and Lands Commissioner that disrupted plans for a north-south transportation corridor.

The minister does not believe any of these issues are insurmountable, and he gave the province credit for making progress in First Nations talks.

The Ring of Fire was the talk of Canada’s mining sector when it was discovered in 2007. But the enthusiasm has evaporated since then as development plans have moved at a glacial pace. U.S. miner Cliffs Natural Resources Inc., the one large mining company to take an interest in the region, suspended its Ring of Fire project last year. And two months ago, the miner’s chief executive told the Financial Post that he doubts the Ring will be developed in his lifetime.

When Cliffs pulled out of the Ring, it cited an uncertain timeline and a lack of solutions around infrastructure. Essentially, it tried to pin much of the blame on Queen’s Park.

Mr. Rickford has a problem with that characterization. He said Cliffs had other internal issues that caused it to pull back from the project. The company is struggling with weak iron ore prices and a high debt load after it overpaid for the troubled Bloom Lake mine in Quebec.

Mr. Rickford remains confident that Ring of Fire development is on the right track, even if his government is not quite ready to hand over that $1-billion just yet.

“I do know a thing or two about infrastructure development in the isolated, remote regions of Northern Ontario,” he said. “And it seems to me that in the next year or two, we should be well underway on a couple of those key projects.”

http://business.financialpost.com/2014/12/18/natural-resources-minister-greg-rickford-says-ring-of-fire-oversight-body-needs-overhaul/