Too Soon for Timeline on Ring of Fire, Negotiator Says

As mining companies wait on the sidelines, aboriginal groups and the Ontario government haven’t even set guidelines for negotiations over how to develop and share the mineral-rich Ring of Fire area, a lawyer representing the indigenous groups said.

Until there’s more certainty over what will be discussed, such as environmental concerns, infrastructure and resource sharing, it’s too soon to say when companies including Cliffs Natural Resources Inc. and Noront Resources Ltd. will be able to mine the Canadian region, said Bob Rae, 65, a former federal Liberal party leader.

“I’m very reluctant to predict the timing,” Rae, who represents the nine indigenous groups in the Matawa Tribal Council, said last week in an interview. “Aboriginal communities historically, and governments and companies, often see the issue of time from a different perspective.”

Aboriginal communities, also known as First Nations in Canada, are negotiating with the Ontario government over how to develop an area 1,000 kilometers (622 miles) northwest of Toronto that the province said may contain C$60 billion ($56 billion) of minerals. In 2010, former Premier Dalton McGuinty called the Ring of Fire, named for the Johnny Cash song, “the most promising mining opportunity in Canada in a century.”

Last month, Cleveland-based Cliffs said it was indefinitely postponing its $3.3 billion chromite project in the region. On its website, Cliffs calls the site North America’s largest known deposit of chromite, which is used to produce stainless steel.

‘Unfinished Agreements’

The company suspended work because of uncertainty about the environmental-assessment process, the mining commissioner’s decision not to approve a proposed road, and “unfinished agreements” with the province critical to the project’s economic viability, Patricia Persico, a Cliffs spokeswoman, said yesterday in an e-mailed statement.

The scope of the environmental review will be decided during the negotiations, Rae said.

A thorough environmental assessment is vital before mining can begin in the area, home to three major river systems, he said.

“That assessment has to involve discussions and community hearings and direct engagement with the First Nations,” he said.

Noront Chief Executive Officer Alan Coutts said that while he’d like to see an all-encompassing agreement completed, his company is busy negotiating benefit agreements with individual aboriginal communities on its own.

‘Things Happening’

The Toronto-based miner hopes to begin producing copper and nickel at its Eagle’s Nest project by 2018, but that depends on “a lot of things happening,” especially the road to the project, Coutts said yesterday in a telephone interview.

The Canadian government expects C$650 billion of resource development across the country in the next decade, federal Natural Resources Minister Joe Oliver said in September. Located far from major cities, many of these projects are an opportunity for Canada’s quickly growing and underemployed First Nations communities to benefit economically, according to a Nov. 28 report by the Fraser Institute, a Vancouver-based research organization that promotes free markets.

First Nations want development as long as they are consulted and can see real benefits for their people, Harvey Yesno, the Grand Chief of the Nishnawbe Aski Nation, a political group representing 49 First Nations communities in northern Ontario, said in a Nov. 22 interview.

Negotiations over the Ring of Fire are making progress, Rae said. The First Nations he represents agreed to end a court challenge against the environmental-assessment process and opted to talk to the province instead, he said.

Still, without larger partnerships, there won’t be development, Rae said.

“We’re a country with a large aboriginal population in places where the resource companies want to go, so they’re going to have to talk to them,” he said.

Before it's here, it's on the Bloomberg Terminal.