A new model for including First Nations in mining projects
Two First Nations from the Fort Frances area have committed to joining the fledgling First Nations Mining Corporation (FNMC), which has a long-term goal of becoming a mine developer and owner.
Six First Nations are now on board as partners in FNMC along with three non-Aboriginal companies, including SNC-Lavalin, one of the leading construction and engineering groups in the world. First Nations will control the majority of shares in the corporation – 51 per cent.
Among those First Nations are the latest additions, Rainy River and Naicatchewenin, both located in Treaty 3 territory near Fort Frances. Stephen Lindley, vice-president of Aboriginal and northern affairs for SNC-Lavalin Group, noted the involvement of the new partners June 19 during a presentation about FNMC at the Ontario Mining Forum in Thunder Bay.
The proposed corporation was first announced in January by its founding partners, which include Lac Seul First Nation in northwestern Ontario and three First Nations belonging to the Wabun tribal council in the northeast – Flying Post, Mattagami and Wahgoshig. Other private sector partners are Cementation Canada, known for underground mine construction and contract mining, and the Morris Group, a smaller company based near Sudbury that provides camp services to mines and resource industry training to First Nations.
FNMC will form joint venture partnerships with local Aboriginal communities to carry out engineering, construction, environmental and other services for mining companies in Ontario.
“At the end of the day, FNMC wants to be the mine owner,” Lindley said at the Ontario Mining Forum. “So really, we’re just walking along that path, piece by piece by piece, to get to that end game.”
As of mid June, “FNMC is still right now at the MOU (memorandum of understanding) stage,” Lindley said. “We’re working extremely hard right now on a definitive agreement and are pretty hopeful we’ll have an incorporated entity within weeks.”
The idea of such a partnership model was born about a year ago. “The concept of the FNMC was developed by a couple of Aboriginal business leaders I’ve worked with for many years … Jason Batise from the Wabun tribal council and Chris Angeconeb from Lac Seul First Nation,” said Lindley. “These two friends approached a couple of their trusted non-Aboriginal partners … with the vision of establishing a company that would be Aboriginally owned and at some point in the future would be capitalized and capable of actually developing mining projects (itself). That’s a pretty big goal.”
Achieving it is considered by the partners to be several years away.
“We think what’s needed to get there is technical capacity, management capacity, as well as financing and, basically, experience,” Lindley said.
Local First Nation partnerships
FNMC intends to establish “local limited partnerships” with First Nations wanting to maximize their involvement in nearby mining projects. The local First Nation would own 51 per cent of the limited partnership, while FNMC would own the balance. So, both FNMC and the local limited partnership would be majority Aboriginal owned.
Through FNMC – “the mother ship,” Lindley called it to help illustrate the model – the local First Nation would draw on the technical mine development capacity that is available through the strategic partners. “Over time, the technical capacity that is developed among the First Nation companies presumably will grow and mature.”
For each mining project, increasing the capacity of the local First Nation’s skills pool would be an immediate priority, said Lindley.
“All three non-Aboriginal partners (in FNMC) have pretty mature training programs at a technical level,” he said. “We have experience partnering with colleges and educational institutions.” FNMC is also committed to investing some of its profits in training programs and capacity building, Lindley added.
The non-Aboriginal partners in FNMC will also use their experience in the mining industry to help local contractors better understand the competitive bidding process and how to effectively respond to a tender, he said, which should help them land more contracts than they would otherwise.
FNMC is counting on mining owners seeing the benefit of a local First Nation having the ability to take on more contracts from this kind of partnering.
“FNMC does provide the opportunity for mine owners to build strong foundations in the community, which at the end of the day are probably measured by ‘social licence’ to operate,” Lindley said. “I think you can see the advantage if the First Nation is right there with you as part … of the project, actually engaged in the environmental permitting and approvals process. That consultation and accommodation process will go a lot more smoothly. That’s the plan.”
Of course, the plan is also for local First Nations and First Nation partners at the FNMC level to accumulate wealth from their participation. Until that wealth is generated, however, FNMC will rely on the financial wherewithal of the large non-Aboriginal partners, Cementation Canada, SNC-Lavalin – which has offices in Canada and more than 40 other countries around the world – and perhaps others that might join FNMC in the future. “We have the ability to access financing; we have the ability to work with mine owners to access financing that even mine owners might not have access to,” Lindley said.
“The concept is that as the company matures and is engaged in projects across Ontario, we will leave shares outstanding for new partners – both First Nations as well as non-Aboriginal strategic partners – to join FNMC,” he added.
“If a First Nation brings an opportunity to FNMC, we’ll give them the opportunity to join as a shareholder in FNMC. Our vision for the number of shareholders really isn’t limited at this point. We see nothing wrong if in time we have most of the First Nations in Ontario as shareholders in FNMC. In fact, that would be kind of cool.”
It’s a new model, a new way of thinking about including First Nations in mining projects as part of sustainable development, Lindley said.
“We can talk resource revenue sharing, we can talk about benefits from IBAs (impact benefit agreements), but ultimately the end game is about Aboriginal ownership and control. And that’s the core value for FNMC. At the end of the day, FNMC wants to be the mine owner.”