Ring of Fire waiting for answers
NORTHERN ONTARIO COMMUNITIES WAITING WORD AS TO WHEN, OR EVEN IF, DEVELOPMENT WILL OCCUR
The nine chiefs of the Matawa First Nations closest to Ontario’s Ring of Fire gathered around a conference table in July 2013 at what seemed like a historic crossroads to debate the merits of development in a region that had never before experienced it.
Promises of jobs, revenue sharing and infrastructure improvements, some said, could bring prosperity to the struggling communities. On the other hand, development could come too rapidly and at too high a cost to their land and traditional way of life.
They needn’t have worried. Three years later, de velopment of t he 5,000-square-kilometre area of the James Bay Lowlands is still stuck in neutral.
The Ring of Fire is a deposit of minerals — including nickel, copper, gold, zinc and the extremely rare chromite — some 540 kilometres north of Thunder Bay that is said to be worth up to $60 billion. Dubbed “Canada’s next oilsands,” it could be the biggest resource development Ontario has seen in more than a century.
But the provincial government, miners and indigenous communities are locked in debate about the best way to physically connect the isolated swampy muskeg, as well as the four closest fly-in reserves, to the rest of Canada for the first time.
During its first decade of development, the Ring of Fire would generate up to $9.4 billion in GDP, create 5,500 jobs annually and generate $2 billion in revenue for federal, provincial and municipal governments, according to an Ontario Chamber of Commerce report.
But nearly 10 years after Richard Nemis, Noront Resources Ltd.’s Johnny Cash-loving founder, discovered the resource, everyone is still awaiting word as to when, or even if, it will begin constructing several planned projects in the area.
The problem, said Laurentian University economist David Robinson, stems from a confluence of factors, including poor planning for Ontario’s north and a massive downturn in commodities prices that caught the province off guard.
“Prices dropped before anybody could really respond and make a decision, so you’re back in a situation where there’s no real pressure to bring that mine on stream,” he said. “Had the prices stayed where they were, they would have a road on the way.”
The stakes are high, he added, since once a good transportation system is put in place, another 20 mines will be developed within five years.
But the way things are going, it could be a while.
Michael Gravelle, Ontario Minister of Northern Development and Mines, has been left on the file through several cabinet shuffles as the province attempts to bring some stability to a tenuous situation. He prefers to highlight the need to “get it right” in the Ring of Fire rather than cave to a sense of urgency.
“Leading infrastructure development in an area of the province that has never seen development before is a complex undertaking,” he said in an emailed statement.
“The province is mindful of the important facets that shape such a timeline: market conditions, discussions with First Nations, and the need for the Government of Canada to partner with us on this project of national significance.”
The Matawa communities already have a list of needs that they drafted during that July 2013 meeting: chiefly infrastructure development and revenue sharing with the province, ultimately in the form of equity ownership in the infrastructure or the mining projects themselves, as well as more immediate concerns such as environmental monitoring.
Many of those needs found their way into what Gravelle repeatedly refers to as a “historic” regional framework agreement established in 2014 with the province. It forms the basis of negotiations based on four pillars: long-term environmental monitoring, infrastructure planning and implementation, socioeconomic development supports and resource revenue sharing.
Aside from agreeing to the terms of negotiation, little progress has been made. But talks have been ongoing between former Liberal leader Bob Rae, who represents the nine Matawa communities, and former Supreme Court justice Frank Iacobucci, who represents the province.
The first issue on the table — the transportation corridor — is still far from being decided. It is not even clear which direction the route would take, who would own it or whether it would be a road, railway or some sort of hybrid aircraft.
Funding for the road could at least partly come from the $1 billion Ontario pledged toward infrastructure in the region in 2014, a sum it called on the federal government to match, though that has so far fallen on deaf ears. Meanwhile, multiple route studies are taking place.
Ottawa and Ontario provided $785,000 to the Matawa communities to study an all-weather road option that would connect Pickle Lake to the mining site, and connect flyin communities along the way, which was completed in June. Noront and KWG Resources have completed their own studies, while the province hired Deloitte to complete an independent study. The community of Marten Falls is also conducting its own study on an alternate road that would run from the Greenstone region in the south to the proposed mine site in the north.
Matawa First Nations chief executive David Paul Achneepineskum said it will likely be 2017 before a final recommendation is made given that issues such as road ownership still need to be addressed.
But deciding on a road is only the first step on the path to development. Issues such as environmental protection and improving onreserve infrastructure — including water, broadband communications and ending a reliance on diesel — must be addressed before the Matawa will give the green light.
“There’s still that issue of what is adequate consultation,” Achneepineskum said. “(The First Nations) would like an agreement that would benefit them most for the long term not just the short term. At the same time, they’re concerned about their livelihood, the water, the environment. All they’ve seen from industry development is what they see on the news, a type of development that’s not good at all.”
The Matawa hold monthly meetings between the chiefs and provide information to communities about the project’s impacts and benefits, but they are also feeling pressure from the government to decide what they actually want.
One stumbling block is the issue of jurisdiction. Eight of the nine Matawa communities are covered by Treaty #9 and many First Nations feel the development impacts everyone covered by that agreement, but there are already outstanding issues with that treaty that need to be resolved.
Further complicating matters is that a series of elections in the communities in 2017 could upend band councils, replace chiefs and further delay development.
For Noront, the lack of progress has been both a blessing and a curse. The company has been building a monopoly by buying land rights in the region as metal prices languish and its competitors bow out.
“That’s really been our focus lately is consolidating the land package,” Noront chief executive Alan Coutts said.
It now owns about 75 per cent of all claims in the Ring of Fire region after a 2015 deal to scoop up Clevelandbased Cliff ’s Natural Resources Inc.’s chromite deposits in the area for US$27.5 million — a fraction of the $550 million Cliff ’s paid to acquire and develop the properties — and taking stakes in nearby MacDonald Mines and KWG Resources properties.
Meanwhile, Noront is making efforts to be as active as it can in the communities by hiring locals for exploration jobs, sponsoring arts programs, reaching out to them on social media and putting out newsletter updates in three languages.
It is also trying to navigate a confusing and complex system of government regulations. Its terms of reference for its first project, Eagle’s Nest, were approved in 2015 with a number of amendments, two years from the date it was submitted.
Progress on the environmental assessment has since ground to a halt. Noront has not been given the go-ahead to submit its environmental assessment report, but is trying to move ahead under the assumption that an unsolicited 5,000-page draft from 2013 will eventually be approved if it addresses those amendments.
One of the major roadblocks is that the government-amended terms of reference asked Noront to engage in “enhanced participation” with all of the communities along its preferred transportation route, a 280-kilometre east-west road, which would double the number of communities it must consult to 20.
With transportation conversations already taking place between First Nations and the province, which is also funding the infrastructure, Noront is considering amending the project description back to just the mine site, which would reduce its “duty to consult” onus to just eight.
Despite the hassles, Coutts said it is exciting to be involved in historic negotiations that could redefine the relationships between First Nations and resource developers.
“Discovery of this region — and its not just an individual mine, it’s a region — warranted a look at how we’re going to develop this area. It came at the same time when Canadians were thinking about how they’re going to renew this relationship with First Nations and Inuit,” he said.
“So these things have coalesced and I think this conversation will be going on all over the nation.”
THEY’RE CONCERNED ABOUT THEIR LIVELIHOOD, THE WATER.