This article is from the Insightwest website. Insightwest offers strategic, compliance and technical-based solutions for the energy and resource sectors. http://www.insightwest.ca/
And it burns, burns, burns, the ring of fire
The ring of fire
On January 11, 1964, Ring of Fire: The Best of Johnny Cash became the number one record on Billboard’s new Country Album Chart. The collection featured some of Cash’s best material and its title track would become the biggest hit of the “Man in Black’s” career. The album, however, was more than a one hit wonder. Several of its songs would also climb the charts and connect with listeners worldwide. For example, Cash re-wrote what became the iconic television score for Bonanza, but its central messages remained the same – the pursuit of fortune, and the thrills of striking it rich. In the anti-war classic The Big Battle, Cash’s social conscience is front and centre, as is the old adage that a fight is not over until it’s over. (There’ll Be) Peace in the Valley (For Me) concludes the album. Its message is one of hope and possibility, rising from the ashes of conflict.
With the 50th anniversary of the Ring of Fire album release around the corner and the 10 year commemoration of Cash’s passing next year, it is timely that the northern Ontario geological discovery that bears the album’s name is front page news today. It is also fitting that the universal themes of hope, desire, war and peace that define the album can be used as frameworks for understanding the Ring of Fire mining developments, as well as the motivations of First Nations, industry, government and environmental groups with vested interests in the region today.
Ring of Fire
“Bound by wild desire, I fell into a ring of fire.”
About 540 kilometres north of Thunder Bay, Ontario, in the river-laden terrain of the James Bay Lowlands, sits a mining exploration area nicknamed the Ring of Fire. Five industry men have been credited with the discovery, including Richard Nemis and John Harvey, veteran prospecting oracles and life-long Johnny Cash aficionados, who named the region over dinner one evening. The Ring of Fire is remote – about 300 kilometres from the nearest railway line and the closest road seemingly light years away. Area infrastructure is practically non-existent.
Speculation is that the mining region contains a rich mix of copper, zinc, nickel, iron, gold, magnesium, platinum and kimberlite. One element not listed has been the centre of hope and even controversy – chromite. If estimates are correct, the area is thought to have the richest deposits of chromite in the world. Currently South Africa, Kazakhstan and India account for more than 80 percent of global production of chromite ore. Chromite is not an expensive commodity – it currently trades at about C$1.50 per pound. Nonetheless, China and India have an insatiable hunger for it. It is also the key ingredient in stainless steel, the status symbol and must-have kitchen covering amongst homeowners who covet its durability and aesthetic quality. Stainless steel is not just for the style savvy, it is also a major component in construction and transportation materials for which there is currently no substitute.
Bonanza
“We chased lady luck, ‘til we finally struck Bonanza…. With a houseful of friends where the rainbow ends, how rich can a fellow be?”
Described by analysts as the most promising mining development in Ontario in over a century, the Ring of Fire has generated more buzz than any other Canadian mining boom in years. While figures vary, Ontario’s Ministry of Northern Development and Mines estimates that the value of the area’s known chromite reserves could be worth as much as C$50 billion during its lifespan. It is more difficult to gauge the combined value for all the commodities still in early stages of exploration in the region, but according to mining consultant, freelance journalist and blogger Stan Sudol, deposits could exceed C$1 trillion.
The potential for the chromite find is clear, but it is only that, potential, until construction begins. Ontario’s governing Liberals have made no secret that they want to see the reserves developed to usher in a new generation of prosperity for a province currently saddled with a job crisis and a C$19-billion deficit.
If industry activity in the region is any indication, then the financial prospects for the province are bright. The website for the Government of Ontario notes that, to date, roughly 30,000 claims have been established in the region, with close to 40 active mining and exploration companies undertaking work. Of these companies, (including the Toronto-based junior development company Noront Resources Ltd. which discovered a large chromite deposit in August, 2007), American diversified miner Cliffs Natural Resources stands out for its ambitious plans.
In May, 2012, Cliffs announced a C$3.3-billion investment in a project that would include the construction of two open pit mines, a tailings impoundment area, as well as ore and chromite processing facilities. The project also includes plans for cutting a 200 kilometre-long roadway through thick boreal forest to transport both materials and people in and out of the site. At the time of the announcement, Cliffs made it clear that a final decision on the project would depend on environmental assessment approvals, on agreements with First Nations communities, on addressing existing infrastructure concerns, and on the completion of commercial and technical feasibility studies. Initial project optimism was recently dampened somewhat when Cliffs announced it had extended chromite production timelines from 2015 to 2017 or later.
The Big Battle
“No son, the battle’s not over, the battle has only begun. The rest of the battle will cover this part that has blackened the sun.”
So far, intense exploration and staking activity in the Ring of Fire has proceeded in an old school, open season sort of fashion. The lack of regulation to-date has led to industry confrontations with some First Nations who, among other issues, express concern over land claims, damage to land and river systems and the adverse effects on their traditional ways of life in an area covered by Treaty 9.
First Nations have been particularly vocal over what they consider inadequate consultation and accommodation, charging that Canadian resource companies and government agencies are disregarding their constitutionally-entrenched right to be consulted in development projects that impact, or have the potential to impact, Aboriginal and treaty rights.
Several First Nations leaders have sought, in different ways, to slow down the pace to activity in the Ring of Fire. In July, 2012, six northwestern Ontario First Nations issued a 30-day eviction notice to all companies with exploration and development camps in the region and threatened a peaceful blockade on the land to prevent operations from taking place. The same month, the Neskantaga First Nation filed a petition with the Ontario Mining and Land Commissioner demanding to be thoroughly consulted before a 340-kilometre road is built through their traditional territory to gain access to a proposed chromite mine in the Attawapiskat River watershed.
Other First Nations have turned to courts to confirm their jurisdictional claims. Kitchenuhmaykoosib Inninuwug (KI), a remote northern Ontario First Nations community, recently won the first stage of a legal battle when the Ontario Superior Court ruled that no award of damages could compensate KI for losses of cultural values if development proposed by Platinex Inc. (exploring platinum deposits) were to occur. The Court granted KI an injunction, preventing the company from working KI’s traditional territory.
Not all First Nations affected by Ring of Fire development are determined to oppose development. During a recent annual meeting of chiefs, a delegate from the Marten Falls First Nation opposed a moratorium and told the assembly that his community, situated on territory where most of the mining activity will take place, has already spoken to, and was working closely with, both Cliffs Natural Resources and the Ontario government to establish a framework to discuss appropriate strategies to move forward.
(There’ll Be) Peace in the Valley (For Me)
“The bear will be gentle and the wolf will be tame. And the lion shall lay down with the lamb….”
The Ring of Fire is poised to become one of the largest mining hubs Canada has ever seen. The lands hold tremendous meaning and potential for industry, for government, for First Nations, and for all Canadians. This potential can only be realized through building lasting relationships – relationships rooted in consultation (engaging early and often), recognition of First Nation and Treaty rights, protection of the environment, and participation of all stakeholders committed to principles of open dialogue and wealth sharing.
It is no secret that the current regulatory systems in place in the region are in need of modernization. Positive steps, however, are being taken. Federally, the government has allocated new money to increase consultations with First Nations in the area of resource development. Provincially, the government has set up an administrative body, the Provincial Ring of Fire Secretariat, to handle matters related to mineral and infrastructure development, and to heighten engagement of First Nations leadership in the James Bay Lowlands.
If the prospects for development and the resulting tensions in the Ring of Fire have taught any lesson, it is that most First Nations in the area are not opposed outright to resource development, but they do not want development to come at the expense of their people and of their homeland. In the past, the mining camps that helped define northern Ontario were the result of haphazard planning and inadequate government involvement. No longer are these approaches tolerable.
The Ring of Fire has presented a transformative opportunity – to industry and to government obviously, but also to First Nations committed to improving their socio-economic conditions. Ontario’s north is far more than a direction on a compass. It is a magnetic pole attracting international business to traditional First Nations lands. Long-standing barriers to development (distance, isolation, improper consultation) remain; nevertheless there are signs that industry, government, environmental groups and First Nations are willing to look beyond past transgressions, and walk the line together towards a more prosperous future.
And it burns, burns, burns, the ring of fire
The ring of fire