Rails to the Ring of Fire – Stan Sudol (Toronto Star – May 30, 2011)

The Toronto Star, has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

For the web’s largest database of articles on the Ring of Fire mining camp, please go to: Ontario’s Ring of Fire Mineral Discovery

“The Ring of Fire railroad should be subsidized by
governments as the huge economic impact will benefit
the economy for decades to come, help balance budgets
and alleviate aboriginal poverty in the surrounding
First Nations communities.” (Stan Sudol)

Notwithstanding the recent correction in commodity prices, near-record highs for gold, silver and a host of base metals essential for industry confirm that the commodity “supercycle” is back and with a vengeance.

China, India, Brazil and many other developing economies are continuing their rapid pace of growth. In 2010, China overtook Japan to become the world’s second largest economy and surpassed the United States to become the biggest producer of cars.

In March, Bank of Canada governor Mark Carney remarked: “Commodity markets are in the midst of a supercycle. . . . Rapid urbanization underpins this growth. . . . Even though history teaches that all booms are finite, this one could go on for some time.”

Quebec’s visionary 25-year “Plan Nord” will see billions invested in northern resource development and infrastructure to take advantage of the tsunami in global metal demand and generate much needed revenue for government programs.

In Ontario, the isolated Ring of Fire mining camp in the James Bay lowlands is one of the most exciting and possibly the richest new Canadian mineral discovery in more than a generation. It has been compared with both the Sudbury Basin and the Abitibi Greenstone belt that includes Timmins, Kirkland Lake, Noranda and Val d’Or.

U.S.-based Cliffs Natural Resources has committed to develop chromite deposits in the Ring of Fire. Chromite is a strategic metal that helps make steel harder and more corrosion-resistant and is produced mainly in politically unstable countries.

The chromite mines by themselves will be a multi-generational operation providing employment opportunities and business ventures for the surrounding First Nations communities. Other mineral discoveries have included nickel, copper, zinc, platinum, palladium, vanadium and titanium.

However, without the necessary transportation infrastructure, none of these mining ventures can be developed. Although Cliffs has a road proposal into the Ring of Fire, past resource developments around the world indicate a railroad would probably be the most economical way to ship bulk mineral products.

KWG Resources, a junior mining company that owns 28 per cent of one of the chromite deposits and controls the best land route into the region (most of the land is muskeg and difficult to build on), has a public-private-partnership rail proposal. The railway would cost up to $2 billion and need about two years for environmental studies and permitting, plus another three years for construction. The company already has spent $15 million on engineering and environmental studies. Part of this proposal suggests that aboriginal communities would eventually own and operate the railroad.

Considering the enormous tax revenue this project would generate, helping both the Harper and McGuinty governments balance their deficit-laden budgets and create jobs, the railroad deserves financial support from both levels of government.

Northern Ontario’s history has many examples of resource development being made possible by government investment. The two most significant were the Canadian Pacific Railroad (CPR) and Temiskaming and Northern Ontario Railroad.

It was the federal government that paid for the construction of the CPR, which led to the discovery of the Sudbury nickel mines in 1883. Given the trillions of dollars worth of economic development over the past 128 years and predictions of another century of mining in the Sudbury Basin, that original investment worked out very well.

At the turn of the last century, the province of Ontario wanted to open up the isolated but fertile clay-belt soils of the Temiskaming region in the northeast. Construction of the Temiskaming and Northern Ontario Railway began in 1903. At a site 165 kilometres miles north of North Bay, lumber contractors working on the railroad made the initial discovery that heralded the Cobalt silver boom. These extremely rich mines yielded a phenomenal 460 million ounces of the precious metal before running out in the 1990s.

In 1909, 100 kilometres north of Cobalt, near Porcupine Lake, gold was discovered. These discoveries produced the legendary Hollinger, MacIntryre and Dome Mines, led to the development of one of Canada’s premier mining camps, and the founding of the city of Timmins.

The Porcupine rush drew prospectors from around the world, which led to another discovery of gold at Kirkland Lake in 1911. Other prospectors crossed the nearby Quebec border and founded the Noranda and Val d’Or mining camps in the early 1920s. The last official gold rush in North America occurred when the precious metal was discovered in 1925 near the shores of Red Lake by men from the Cobalt camp.

Over the past century, the Porcupine Camp has produced 72 million ounces and counting; Kirkland Lake has produced 38 million ounces to date and Red Lake had produced 26 million up to 2006. By comparison, the Klondike produced only 12.5 million ounces during its decade-long rush.

The vast wealth of Northern Ontario’s and northwestern Quebec’s hard-rock mines was funneled into Toronto’s financial district, making the city the mine-financing capital of the world.

Ontario’s internationally recognized mining supply and service industries — the two most important clusters are located in the Greater Toronto Area and Sudbury — export their technical hard-rock mining expertise, knowledge and products around the world.

The Ring of Fire railroad should be subsidized by governments as the huge economic impact will benefit the economy for decades to come, help balance budgets and alleviate aboriginal poverty in the surrounding First Nations communities.

Stan Sudol is a Toronto-based communications consultant and columnist who blogs at: www.republicofmining.com