The National Post is Canada’s second largest national paper.
Northern Promise is a six-part series that explores the pace and progress of development in Canada’s remote communities. In this first instalment, Peter Koven covers the glacial-paced evolution of Ontario’s Ring of Fire.
Six years ago, there was no talk about uncertainty over environmental permits or First Nations disputes. The only mood surrounding the Ring of Fire was sheer euphoria.
When a then-unknown company called Noront Resources Ltd. announced its first discovery hole in the James Bay Lowlands in August 2007, it launched a staking rush and investor frenzy of unprecedented proportions for an Ontario project. Junior mining companies flocked to the region, and the mere mention that they had some land was likely to triple their stock price. It all culminated in Noront’s annual meeting that October, a giant party disguised as a shareholder meeting in which Johnny Cash’s Ring of Fire was blared at full volume and then-chief executive Richard Nemis was treated like a rock star.
Sadly, that Noront AGM turned out to be the high point for the Ring of Fire story so far.
That is not due to the quality of the discovery. The Ring turned out to be far bigger than first anticipated, with an estimated $30-billion to $50-billion of minerals in the ground. But the exploration success has become a liability; the project has become so huge and so important to Ontario that everyone is working with extra caution to make sure it is done properly. For people watching from the outside, it feels like a glacial pace.
“This is a legacy resource development project,” said Greg Rickford, the federal minister in charge of the Ring of Fire. “It will require collaboration at every level of government.”
Development is caught in an enormous bureaucracy. The permitting process cannot even start until a court decides what environmental assessment process will be used. First Nations groups continue to express concerns. And the companies that want to develop the region (Noront and Cliffs Natural Resources Inc.) are in such poor financial condition that the concept of them spending billions of dollars to build mines is questionable.
Meanwhile, the Ring of Fire remains the same desolate, mosquito-infested swamp that it was six years ago, a reminder of how much needs to be done to kickstart development.
Cliffs has thrown in the towel for the time being. It suspended work on its US$3.3-billion Black Thor chromite project in the Ring in June after making no progress on key issues with Queens Park and First Nations. Noront shares, meanwhile, are down 97% from their peak, and Mr. Nemis, the man responsible for all this, was turfed out by his own investors years ago.
For the rest of this article, click here: http://business.financialpost.com/2013/08/12/northern-promise-ring-of-fire-smoulders-anew/?__lsa=88b0-c7be