Suspension of Cliffs’ chromite project a relief to First Nations, Ferris says
More than two months after the Ontario government announced it, Matawa First Nations had yet to endorse a proposed development corporation for building infrastructure to the Ring of Fire mineral development. Ontario declared in early November it would lead the creation of such a business structure.
“Recent developments, and divergent private sector interests, have impacted our ability to move forward on vital infrastructure required to develop the region,” said Michael Gravelle, minister of northern development and mines.
“Currently there are a variety of proposals for infrastructure development. They propose different corridors and different modes of transportation but in the end, they all lead to the same place. In recent weeks, it has become increasingly clear to me that we need to determine exactly what those infrastructure needs are, and we need to do it now.”
As a result, Gravelle said, “The creation of a development corporation will bring First Nations, mining companies, and provincial and federal partners together to settle divergent interests and get back to making this development happen. They will determine infrastructure needs and financing to support infrastructure development. We will reach out to our partners immediately to ensure work starts today.”
That immediate work would include determining the development corporation’s scope and a suitable governance model, Gravelle’s ministry stated in a news release. Once established, the corporation is to develop, construct, finance, operate and maintain infrastructure to the Ring of Fire.
The nine member First Nations of the Matawa tribal council have been invited to participate as partners in the corporation.
“There is no question that vital infrastructure is required in the region to support remote First Nations communities,” said Frank Iacobucci, Ontario’s lead negotiator for Ring of Fire talks with Matawa. “Using a development corporation model to advance infrastructure development will ensure First Nations can participate in the governance and use of the transportation infrastructure.”
But Raymond Ferris, Ring of Fire co-ordinator for Matawa, hasn’t been so enthusiastic. “As of today, the First Nations do not understand the benefit of this corporation,” Ferris told Onotassiniik in a Jan. 17 e-mail. “Ontario has stated the First Nations will be part of developing this corporation. That is all we know at this point. Whether this is a positive or negative is something that will be decided after much discussion.”
Both Ferris and Iacobucci indicated the development corporation concept would be discussed as part of ongoing deliberations between Matawa and Ontario. Bob Rae, the province’s former premier, has been Matawa’s chief negotiator for these “regional strategy” talks, which in addition to infrastructure planning and development were expected to address environmental protection and monitoring, resource revenue sharing, and social and economic supports. Ferris said he anticipated a broad framework agreement would be reached early this year.
“The chiefs are continuing their discussions at the community level and the regional level to ensure that decisions at the community level are not interfered with, but supported at other levels,” he added.
Ontario publicly introduced the development corporation idea Nov. 8.
Less than two weeks later, Nov. 20, Cliffs Natural Resources announced it was suspending indefinitely its $3.3-billion chromite project in the Ring of Fire – the largest mining development proposed for the area. “The company determined that it will not allocate additional capital for the project given the uncertain timeline and risks associated with the development of necessary infrastructure to bring this project online,” Cliffs stated in a news release.
Previously, in September, the Ontario Mining and Lands Commissioner dismissed Cliffs’ application for an easement that would have allowed it to build an all-weather road to the Ring of Fire area over mining claims held by another company, KWG Resources (through its subsidiary, Canada Chrome Corporation), which instead proposes a railroad for the north-south route. Cliffs appealed the decision.
In June, Cliffs suspended its environmental assessment (EA) activities, citing uncertainty over the federal EA process, lack of approval on terms of reference for a provincial EA, and the pending decision on land access for the all-weather road.
Of the more recent decision by Cliffs to suspend its whole project, Ferris remarked: “Given the value of Cliffs’ shares, this was not a surprise and somewhat expected. Cliffs had warned us this may happen, as iron ore prices are very low and iron ore represents the core business of Cliffs. This was a business decision.
“It came as a relief,” Ferris added. “There was too much pressure on the First Nations, as they are not prepared to be involved in the environmental assessment process. The First Nations need the time to prepare so that they can be fully engaged in the decision-making process.”
To be fully engaged, he said, First Nations must first be properly resourced to study a range of key issues, from environmental to socio-economic to community and regional infrastructure. “This will assist the First Nations to be totally involved in putting concerns and solutions forward.”
For its part, the province continues to tout the proposed Ring of Fire development corporation as “the vehicle that will bring key stakeholders together to find an (infrastructure) solution that allows for development to occur in a smart, sustainable and collaborative way.”
Julia Bennett, a spokeswoman for the Ministry of Northern Development and Mines, said in January that Ontario is also seeking a “direct role” for the federal government as a partner in the corporation, especially for “infrastructure supporting communities in the region.”
Bennett said the province is prepared to make a significant investment toward the infrastructure and is expecting the federal government to provide matching funds, the same way it has with other projects across Canada. “Any investment would be determined by the route and type of infrastructure, and would also be subject to environmental assessment and regulatory processes and approvals and the Crown meeting its duty to consult. The amount committed will be established when all the partners are on board.”
In a letter to Prime Minister Stephen Harper the same day the development corporation was announced, Premier Kathleen Wynne said capital investment required for “industrial infrastructure” to the Ring of Fire could cost up to $1 billion. And the price for connecting First Nation communities in the area to all-season access roads would be another $1.25 billion, her government estimated.
“Right now, Ontario is moving forward in discussions with the federal government and the conversations have been encouraging,” said Bennett. Meetings, including one Dec. 5 between Wynne and Harper, “have highlighted that the provincial and federal governments share the same goal: realizing the tremendous benefits associated with this project.”
Cliffs, meanwhile, while suspending its chromite project also expressed support for the development corporation plan, and indicated it would participate in related discussions.
Noront Resources, which in December submitted a draft environmental assessment report for its planned Eagle’s Nest mine for nickel, copper and platinum group metals, said it would participate in the proposed corporation. “As we near completion of our EA process, clarity regarding the timing and financing of this infrastructure will become paramount,” Alan Coutts, president and CEO of Noront, said in a news release.
And Frank Smeenk, CEO and president of KWG, told CBC News he was enthusiastic about Ontario’s planned development corporation, since his company had been proposing a similar model.
“The development corporation would act as a vehicle for investment, leveraging private and public sector investments,” Gravelle said.