Ontario’s Mythical & Potentially Lucrative Ring of Fire -by Blogger Milkyminx (January 18, 2011)

Approximately 480 kilometres northeast of Thunder Bay, Ontario is the mythical Ring of Fire, which has, for years, been whispering hope to miners and investors, while steadily disquieting environmentalists.

The story of the Ring is punctuated with surprises.

It begins with junior exploration companies (including Spider Resources Inc., KWG Resources Inc., and Freewest Resources Inc.) digging for diamonds in the McFauld’s Lake area of northern Ontario. None could resist fortune’s lure in the mid 1990s when diamond company, De Beers Canada Inc., began re-examining the area’s diamond-producing kimberlite pipes.

Instead of diamonds, however, they found copper and zinc. But that was enough to spur other small players to begin digging nearby.

Then in 2007, Noront Resources Ltd. found high-grade nickel with copper and palladium, confirming the potency of the area. This excited mine operators, who coined and began publicizing the phrase, “Ring of Fire,” to describe the mineral-rich exploration zone.

Subsequently, Noront and Freewest each discovered notable deposits of a glittery black mineral called chromite, and the fire blazed a little hotter; hot enough for U.S. iron ore and coal producer, Cliffs Natural Resources Inc. to feel the heat, and later, sensing a growth opportunity, purchasing Freewest, and what Forbes magazine reported as 50 years worth of chromite.

By 2015, Cliffs (which now owns the chromite sites: Black Thor and Black Label, with majority shares in Big Daddy) expects to begin producing 1 million to 2 million tonnes of high-grade chromite annually. In total, these Ring of Fire holdings provide for what the company calls “a long mine life and expansion potential.” And in all likelihood, with Freewest’s assets, this is more than 50 years long.

Progress has a Price

Lying north of the 51st parallel, and spanning from Ontario’s western boundary with Manitoba to its eastern boundary with Quebec, the Far North encompasses the Ring of Fire, and comprises more than 40 per cent of the province of Ontario, but constitutes less than one per cent of the provincial population.

A total of 24, 000 First Nations people, in 36 communities, inhabit this Far North region, according to government stats.

For them, mining the tundra and boreal forests of this region for chromite and other minerals could mean infrastructure development, as well as jobs. But not only them, others in Ontario would benefit as chromite is mined, refined, and used to enhance steel, which manufacturers then use to create both industrial and retail consumer products, often stainless steel household products or construction material.

Mining can benefit the economy in various ways. De Beers, for example, reports spending $1 billon to establish their Victor diamond mine — Ontario’s first diamond mine, in the James Bay lowlands area of the Far North — with “approximately C$167 million spent with Aboriginal businesses or joint venture partners.”

The aboriginal communities also benefited from education and youth literacy initiatives to the tune of $3.8 million, according to De Beers’ 2009 Report to Society, indicating the very basic needs that industrial enterprise fulfill in these northern communities.

The province of Ontario, De Beers estimates, will also accumulate C$6.7 billion in GDP while the diamond mine is in operation.

So, adding a chromite mine to the provincial cache would brighten Ontario’s financial picture, especially in light of worldwide financial difficulties, present since 2008.

But in the Far North, each community is its own bargaining force, and brings its own interests to the table.

For instance, De Beers notes on its website that between 2005 and 2009 it signed four Impact Benefit Agreements (IBA) with four First Nations communities around the Victor diamond mine.

These agreements represent progress, co-operation and respect for native rights, but such fragmentation is what Toronto Star environmental columnist, Peter Gorrie calls, “a recipe for short-term thinking and future conflict.”

What’s more, these agreements, which are unavailable to us, cannot automatically be deemed sufficient in protecting the environment.

Entertainment and news media might lull us into believing that First Nations groups will protect the environment, or signal alarms when necessary, especially being aware of Mohawk principles that tie today’s actions to tomorrow’s generations — specifically seven generations out; but aboriginal communities aren’t the only ones responsible for tomorrow, and to expect that of them would be unfair. After all, it’s not only their great, great, great, great grandchildren who will inherit the earth.

The Case for Early Environmental Protection

Mining, in addition to other human activity and development, stresses the environment, and the cumulative impacts on biodiversity and ecological integrity may include habitat loss/alteration, habitat fragmentation, introduction of foreign species, pollution, and land degradation, as was found in a 2002 study performed by AXYS Environmental Consulting Ltd., and found on the Nature Canada web site.

Marten Falls Chief Eli Moonias has complained of environmental damage at McFauld’s Lake by exploration companies that were there in 2007. Asked about this, Tracey Burton, Project Co-ordinator with the Ministry of Northern Development, Mines and Forestry (MNDMF) explained via e-mail that in February 2010 several government ministries, including the Environment, Natural Resources Labour, Forestry, participated in an inter-ministerial education and outreach workshop targeting exploration companies, camp operators, expediters, and drill contractors, and that field visits were planned for the summer.

The results of that work were not communicated to me, but Moonias’ complaint highlights the need to take steps to protect the environment prior to exploration. Afterall, with blind faith alone, cleanup costs may become tax-payer responsibility, and people can be harmed.

Look at India. It has one of the world’s largest open-pit chromite ore mines, in Sukinda township. There, Forbes reported in 2007 that nearly 70 per cent of the surface water and 60 per cent of the drinking water contains excessive levels of the carcinogenic, hexavalent chromium.

This has helped chromite place third on the list of top six toxic threats for 2010. The list is compiled by the Blacksmith Institute, an organization which aims to eliminate life-threatening pollution worldwide.

The organization reports that various forms of chromite exposure can lead to gastrointestinal, respiratory, reproductive, immune system and developmental problems; problems which are preventable, if due to chromite mining and poor environment regulations.

Environmental Assessments

It’s unlikely that precautions were taken in Sukinda to prevent the damage noted above, but early environmental assessments would have helped.

Environmental assessments are expected to minimize or avoid adverse environmental effects before they occur and allow for environmental concerns to factor into decision-making as early as possible. In fact, environmental assessments are most beneficial, if kept up as conditions change and assumptions challenged.

Commercial concerns, however, often outweigh calls for these assessments.

A December 2010 KWG news release, says Ontario’s chromite deposits represent “potential continental self-sufficiency and a Canadian export commodity that is crucial to Canada’s allied trading partners.” Presumably, the U.S. is that key trading partner referred to here, since the news release mentions a leaked U.S. State Department document that listed chrome in Kazakhstan and India as “strategic assets.”

Currently, South Africa is the largest producer of Chromite ore, followed by Kazakhstan and India, according to the International Chromium Development Association (ICDA).

But if comparable and higher grade chromite were mined in Ontario, North America, steel mills, would no longer have to import it, as most currently do, from South Africa. And the deposits from the Ring of Fire have consistently out-ranked South Africa’s.

Mining in Modern Times

Mining is essential in providing the natural resources that our growth-focused societies require, but it presents a challenge: preserving the quality of the land, air and water we all need for survival.

Modern mining techniques mean mines can move from development to closure with fewer environmental impacts. However, cost, in terms of time and money, are prime inhibitors, at least as viewed by the investment community. They know that environmentally sound decisions require more planning and systematic analysis, and ultimately, more financial resources. The gains seem to be another matter.

Neither Cliffs nor Noront Industries, both having significant interest in the Ring of Fire, are proposing anything but the cheaper, more environmentally destructive open-pit mines which involves removing overburden (vegetation, rock and soil), to allow for faster harvesting of minerals and less manpower. Underground mining methods, which have been used in South Africa, were neither suggested, nor dismissed with explanation.

If open-pit mining is the chosen format, then mine closure plans offer hope for repairing the damage and beautifying what will develop into huge craters — less inspiring signs of progress.

Mining closure plans attempt to return the environment to it’s pre-mining condition, but what took eons to create, cannot be replicated overnight on the ground. Ground that government figures say absorbs more than 12.5 million tonnes of carbon dioxide (greenhouse gases) from the atmosphere each year, not just for Ontarians, not even just for Canadians, but for all who share the Earth.

Yet, looking at all the pieces of legislation that one might expect to apply to mining, there are several holes through which environmental stewardship falls; But maybe that’s because the stewards are pre-occupied, above all, with encouraging investment.

Michael Gravelle, Ontario’s Minister of Northern Development, Mines and Forestry, last year summed up the government’s focus on natural resource development in the Far North, in the Ontario Mining and Exploration Directory.

“We are working to ensure that Ontario remains a premiere destination for mineral exploration and mining investment,” he said, “and that the mining sector continues to be a vibrant element of the provincial economy.”

He recognized mining as one of Ontario’s “economic pillars,” expecting the geological trove to keep providing economic benefit. And even he seems excited by what he called, “the first potentially world-class deposit of chromite” in the Ring of Fire.

In the Directory, the Minister also mentions modernizing Ontario’s Mining Act to officially recognize Aboriginal rights and create dispute resolution processes; deal with land and mineral rights; and “link mining development to land use planning in Ontario’s Far North.” However, the Act only applies to properties or initiatives that fall under government (crown) jurisdiction. Therefore, it’s positive aspects, such as Class Environmental Assessments, and cross-ministerial co-operation to protect species at risk, do not have the full impact possible. It also comes in at advanced stages of exploration, even though environmental damage can occur earlier. And as Burton mentioned, “[t]he planning and design of a mining project may take 10 to 20 years of speculative and detailed exploration, data analysis, planning and financing.”

That is a long time, within which much environmental damage may occur.

A comprehensive public agency that would ensure full oversight of mining projects in Ontario seems idea under these circumstances, but have been ruled out. For this, Burton faults the cumbersome mining review and approvals process, which involves multiple authorities.

Unfortunately, the Ontario Environmental Assessment Act (EAA) doesn’t pick up the Mining Act’s slack. It exists separately from the Mining Act and primarily applies to government initiatives, as well; for example, provincial ministries dealing with roads, transit etc. Private sector entities may voluntarily comply with the EAA, and must if mandated to do so by law (for example, waste management companies or commercial energy providers); But, in general, mining companies are exempt, unless either the environment minister, or the public demand an individual environmental assessment.

For the rest of this article, please go to The Milkyminx website: http://milkyminx.wordpress.com/2011/01/18/ontarios-mythical-potentially-lucrative-ring-of-fire/