Front Burner - Electric vehicles and an Ontario mining conundrum

Episode Date: August 19, 2022

The United States’ new and historic climate law is being hailed by some Canadian politicians and environmental advocates as a chance to turn Canada into a global hub for electric cars and their components. That’s thanks in part to money and incentives which could potentially give a boost to companies mining in Canada for the minerals used to make electric vehicle batteries. If that sounds like a big green win for Canada — it is. But it’s also more complicated than that. Today, we’re taking a look at one example where the promise of mining for nickel to power electric vehicles is presenting a climate conundrum: the Ring of Fire, a mineral-rich but ecologically sensitive region in northern Ontario. Our guest is Emma McIntosh, The Narwhal’s Ontario environment reporter.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Jamie Poisson. The Inflation Reduction Act invests $369 billion to take the most aggressive action ever, ever, ever, ever in confronting the climate crisis and strengthening our energy security. That's U.S. President Joe Biden before he signed a sweeping health care and environment bill on Tuesday.

The money is expected to get the U.S. a lot closer to meeting its climate goals, which is great if, you know, you're a human living on this planet. But if you're a Canadian automotive or mining company, you might have been equally happy about this. It gives consumers a tax credit to buy electric vehicles or fuel cell vehicles, new or used. And it gives them a credit, a tax credit of up to $7,500 if those vehicles were made in America. In this case, made in America actually does mean North America, not just the U.S. And Canada has deposits of minerals like nickel, which could be essential for meeting requirements that battery components come from this continent. Canadian politicians have talked big about our potential place in the international market.

Canada isn't just going to be a global player in EVs. We demonstrate that we get to be global leaders in electric vehicles. Ontario is the number one place in the world to build the cars and trucks of the future. And there's actually 500 million U.S. in Biden's bill, plus 600 million in a previous bill that can be used for mineral projects, which Canadian officials hope will apply to development here. But if this all seems like an easy green win for Canada, today I want to bring you one example of why actually mining these minerals could involve a climate contradiction. Emma McIntosh is the Ontario environment reporter for the Narwhal, and she's been covering a mineral-rich region

in the north known as the Ring of Fire. She's here to tell me why while some believe mining the ring could be an economic and environmental win, others worry it could cost more than it ever makes and hurt the environment more than it helps. Hey, Emma. It's great to have you. Hey, thanks for having me. So let's start at the beginning here. Why do we call this area in Northern Ontario the Ring of Fire? Well, first of all, the group of guys working for Noron Resources who discovered these deposits were huge fans of Johnny Cash. And this is when I would play the song.

And so the name was partially inspired by that. But also when you look at the Ring of Fire on a map, the deposits do kind of look like a ring shape. So it wasn't coming from nowhere. Okay. And around the time that these deposits were discovered in 2007, why were mining companies and these Johnny Cash fans so excited about the potential of the minerals here? So when these deposits are first discovered, everyone was really excited about chromite, which is used to make stainless steel. And this like this discovery, I cannot understate the amount of like excitement there was about this. There was this blitz of mining claims, this huge rush with everyone trying to be like the first to stake a claim and get something good.

All this rapture over its potential. and get something good. All this rapture over its potential. This bubble of ancient magma cooled 2 billion years ago, but the heat is on again as a flurry of mining claims hits the area. The province, mining companies, and First Nation communities are all vying for a share of the possible riches this mineral deposit may hold. Now, you know, things have changed a little bit. Global markets are fickle and the focus is more on nickel now.

Right. And nickel is used to make batteries for electric vehicles. Talk to me about what politicians have said about the ring over the last 15 years since its discovery. What kind of commitments have we heard from them about mining the minerals? What kind of commitments have we heard from them about mining the minerals? Oh, man. Yeah, it's been such an irresistible temptation for a successive line of premiers and federal politicians as well. Ontario's premier is meeting with Prime Minister Stephen Harper, hoping to breathe new life into the Ring of Fire. Here's Premier Kathleen Wynne just prior to her meeting. There is agreement among all parties that the Ring of Fire is a huge opportunity for the North, it's a huge opportunity for Ontario and it's a huge opportunity for the country. One minister responsible for this,

aside from calling out the oil sands, was throwing out it would contribute 120 billion billion to the economy. That's probably not the right number. But that was out there. It's called No Ordinary Mine Development. And basically, what you're looking at is a whole new area of minerals extraction, mineral development in an area where they need more economic activity. But the scope of this is so large that it's really something of national importance. It's not just of local or regional importance. You know, more recently, Ontario Premier Doug Ford has kind of quipped that he's going to make it happen if he has to hop on a bulldozer himself. It's just like the not forbidden fruit, but unreachable fruit for a lot of politicians.

OK. And despite all of these promises, you're right, there's no mining in the ring, right? Like all these years on, not even construction on a road there. And so let's talk about why that is. I understand the location is hard, right? It's hard to develop because it's so remote. Tell me more about that. Yeah, the Ring of Fire is quite far away. So if we think of Toronto, where a lot of these decisions about mining are being made, you know, at Queen's Park or on Bay Street, we think of that as pretty far from Thunder Bay, right, which is in northern Ontario. Well, the Ring of Fire is like 500 more kilometers north of that so it's it's quite remote and it's disconnected from the provincial highway network which means that right now it is only accessible by ice road in

the winter which is becoming less feasible due to climate change anyway which is an issue or flights and those are expensive and like none of this is super practical for heavy mining equipment or like getting the stuff you get out of the ground out of there. Like it's just not going to work. They would need a real road. This is going to sound like a really stupid question, but like what, explain to me what an ice road is. Oh yeah. So an ice road is exactly what it sounds like. In the winter, things are very frozen over up there and the ice is very thick. You can form a road and that's often how supplies get through to remote communities in the far north. Okay. And then let's talk about what it would take to

build the road, right? Like the idea here is that we would use these minerals for electric car batteries, which are supposed to help the environment, but what kind of impact could developing the ring have, like even just building a road out there? Yeah, well, first of all, like building the road is a complex endeavor. You would have to cross the world's second largest complex of wetlands. They're also called like peatlands. They're like, for the sake of construction, they're very boggy and building anything on top is going to be super difficult and super expensive. Like the Ontario government has estimated that we're talking like an average of 2.69 million dollars per kilometer and we're talking like hundreds of kilometers here so that's a lot and the other

question is like should we because of the environmental impact and peatlands are a major carbon sink and a natural one too right um they They form very slowly over time. So if humans disturb them, they don't really like grow back. So we'd be disturbing this huge natural carbon sink. And just to give you like an idea of how much we're talking about here, if all of the peatland area covered by mining claims in the Ring of Fire was disturbed, that would release between like 130 and 250 megatons of carbon dioxide into the atmosphere, which is equivalent to the annual emissions from like up to 280 million cars. And that's according to a study that came out last year. Some of the folks behind that study told me recently that they've actually updated their numbers.

And it's probably more like twice that. So it's a huge environmental impact. And that's, yeah, something we have to consider. And beyond the peatlands, mining itself can be carbon intensive too, right? Yeah, that's exactly it. Some of the companies that are looking to start mining in the Ring of Fire want to have a net zero operation, which theoretically is good. But no one's really sure what that means right now. Like, would that account for disturbances from the road or would that account for disturbances from like clearing the land itself? Right. There are a lot of big questions that need to be answered.

And even aside from the carbon impacts of that on the climate, we also shouldn't forget that this area is important for biodiversity too. There are a ton of really important species and endangered species that are there. Like think about bald eagles. Those things would all be impacted by mining development as well. A simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix.

I've been talking about money for 20 years. I've talked to millions of people and I have some startling numbers to share with you. years. I've talked to millions of people and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo. 50%. That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Cups. You mentioned before claims about, you know, how much money there potentially is to make here. But what do we know about how valuable these mineral deposits actually are?

Like the potential for jobs and the profits? We don't know a lot. And what we do know is very unreliable. So some of those big numbers come from, you know, the year 2013. So you can picture it, right? Like, I had side bangs, Royals by Lorde came out that year. It was a while ago. And a respected geologist put it out there that he thought that the ring could contain like $60 billion worth of minerals. And all kinds of assumptions were made based on that about the jobs benefits and the GDP. The problem is it's just not proven. The Globe and Mail did some excellent investigative work in 2019. And they found that those numbers were aspirational hogwash. That is a quote. And the guy who came up with them has actually told people that they're not reliable,

that he never should have put them out there in the first place and they should stop using them. And frankly, even if he hadn't taken them back, the numbers are a decade old. Like a lot, you know, I got to repeat this. I had side banks in 2013. Like it was, things have changed. And like, I spoke to one mining consultant in the US named Patrick Ryan, who told me, you know, and this is a quote as well, it's just some stupid idea in Canada, and it's never going to be built. I guess it's possible that the government spends billions of dollars in roads and infrastructure and like, we might not even get shovels in the ground. Like, are there companies interested in mining? Oh, yeah, there are companies interested.

interested in mining? Oh, yeah, there are companies interested. So the biggest player is Noront Resources. They hold the vast majority of the mining claims. And they're also making the most headlines. So recently, they were the subject of this huge bidding war between two Australian mining heavyweights. And the winner was this Australian billionaire named Andrew Forrest, weights. And the winner was this Australian billionaire named Andrew Forrest, who's running this company, Wylue Metals. So Wylue now owns Noront. And that's kind of brought this whole rush of enthusiasm that this is actually going to happen because before this, Noront was struggling. So that's Noront. They're the main player, but there are some other smaller players as well. There is one other company that has made headlines over its Ring of Fire aspirations. You might remember in 2016, there was a bit of controversy over this.

Their name's KWG, and they produced a series of videos called Mining Minute. Mining Minute. I'm your host, Teresa Longo, with my special guest co-host, Ashley. Mining Minute, I'm your host, Teresa Longo, with my special guest co-host, Ashley. The one that really attracted attention starred two beautiful women in bikinis sharing fun facts about the Ring of Fire. Tony Clement said the Ring of Fire will bring 100 years of mining activity, spitting off jobs for generations. I got five 12,000 BTU stainless steel tube burners under the hood here. You know what else makes stainless steel? Chromite. Why?

Why? At the time, the CEO defended it. And he said, this is a quote, attractive women attract eyes. And I guess maybe a counterpoint to that is if you're resorting to the bikini babes to promote your mining project, like maybe things aren't going exactly according to plan the normal way. So it's KWG still holds land. And there's a third company that's doing some exploratory drilling. And that's been the subject of some court challenges. But but for our purposes, like Noront is the one you really should know.

More than a dozen First Nations are near the ring. It's entirely Treaty 9 territory, right? So how have Indigenous communities reacted to plans for development here? Strikes me that this would be a pretty large component of any sort of attempt to mine the area, right? Yeah, it should be. So I guess to start with like the road, a lot of chiefs and communities and individuals within those communities all have like different thoughts about what should happen, right? Like reminder, you know, these communities do not have a permanent road right now.

And at the same time, like many First Nations in the far north are coping with a whole bunch of overlapping crises, which are like definitely due to the ongoing impact of colonization, right? So we know about this. We have like long-term boil water advisories. There's suicide crises, high food prices, and some communities and some people see a road to the south as a way to improve their quality of life. And, you know, it could connect them to economic opportunities and to better services that would be really helpful. But some communities and some people have concerns about the way this is going.

But exploration means the building of camps, that means fuel depots, transportation routes, clear cutting, and the shipping in of supplies, food, and items that will eventually become waste. This expanded activity can damage trap lines, disrupt sacred sites, and disturb animal migrations. Setting aside, you know, whether they want a road or want mining, they feel like they're not really being given true input on something that will dramatically change the way they live and dramatically shape their future for decades to come. Right. And so that's been a big problem. So, yeah, some people are opposed to mining, especially with concerns over the environmental impact. And some people are in favor.

But I think like one common view is that they really need to be at the table as equal partners in this because of how important it is so you know what we're saying is you know if it involves the land in our in our traditional areas you know we should have involvement especially at the ring of fire you know, we should have involvement, especially at the Ring of Fire. You know, we should be taking the lead on any government process that involves making policy and making decisions in the future. It seems like it's going on the status quo as the government makes the law, they make the policy. First Nations are merely, right now, pawns in that scheme. Even beyond the ethics of moving forward on development like this without all of the community's approval, the First Nations here also have rights, right? Like including treaty rights. And it would be difficult to move forward without their consent, right?

That's right. And many nations actually would argue that their treaty rights are not being upheld. upheld. And if that continues, there's a very real possibility that this stuff might end up going to the courts, which can hold up these projects even more and make them more expensive, like even beyond just like the ethics of like making sure that the people whose homeland it is have a say in its future. A failure to do proper consultation can also really, really hold back whether the project is even feasible. So given all of these complicating factors, how close are we to actually pulling minerals out of the ground? Like when Doug Ford says that he's going to get on a bulldozer himself,

how close are we to actually starting to move on this? we to actually starting to move on this? We are not that close. I think we're probably closer right now than we have been in a long time and maybe ever, but that's still not very far. There are a whole bunch of environmental assessments underway right now for road projects to the ring of fire. And I know the word environmental assessment makes everyone's eyes glaze over, but I promise it's so important and actually quite spicy as well. There's a whole bunch going on. There's these three road proposals

that the Ford government is really trying to make happen that are being led by two First Nations in the Ring of Fire area. And that's Martin Falls First Nation and Webequay First Nation. This is a move forward for us in terms of economic reconciliation, alleviating the conditions in the community, the poverty levels that we have faced in the decades past. in the decades past. And, you know, there's a lot of work to do in those socioeconomic areas within our community

and within our neighboring Matawa First Nation communities. And those are going through the provincial environmental assessment process, the federal environmental assessment process. And then even, like, beyond that, the federal government is doing a full other assessment of just like what should happen with the region's future. And even if those things get done and these roads get to completion, which is like not a given, then there would have to be more assessments for any mining projects that actually happen. And then on top of that, like a huge other problem is that the Ford government has still not figured out how it's going to pay for that very expensive road, which

like, by the way, might require up to 50 bridges. Like one bridge is a big endeavor. That's a lot of bridges. Wow. Ontario was asked the federal government to chip in $1 billion to this. And yeah, that was a B, like $1 billion. Ontario has already yeah, that was a B, like $1 billion. Ontario's already set aside the same amount of money, but it's a big ask and it's not really clear whether they're going to bite. Where is the federal government on this? Are they ready to move? Do they want to move forward on this? On the one hand, they're all in on getting minerals for electric vehicle batteries. Like that's a no brainer, except they also really care about reconciliation, they say.

And when you are advancing reconciliation, it's kind of a tough sell to force through a project that several communities are opposing on treaty territory. And so the federal government has said, like, maybe they're willing to chip in on this, but it needs to be advanced in partnership with First Nations. And right now, like, it's just not there. Okay. All right. So this is not happening next year, right? Like, though, like, it strikes me in this conversation that there's this giant dilemma looming over all of this. We have to get off fossil fuel vehicles to halt climate change. And mining these minerals is a necessary step to make electric vehicles.

If we don't swallow the negatives on a project like this and get moving, how do we move forward with a green transition? I wonder how you're reflecting on that. Yeah, I think really the big problem here is that sometimes we talk about new technology and like cleaner technology, like electric vehicles, like they're kind of a silver bullet, but they're not. The reality is much, much more complicated. but they're not. The reality is much, much more complicated. These minerals have to come from somewhere. And it's a very real question. Do we actually want to source the minerals we need for this by hurting the environment in the process? Is it a good idea to remove something that's naturally doing the work that we want to do so that we can make that happen. It's uncomfortable. Some people ask like, well, if we don't get these minerals here, where are we going to get them? Well, there are nickel deposits elsewhere in Canada.

Some people argue that the ones in the Ring of Fire are better. But like that aside, you could probably get it somewhere else. If not, you might have to turn to other countries where it's not going to be a net zero mine. The labor standards might not be as high. So yeah, like that's a problem. But even beyond that, I mean, we have no idea what the markets are going to look like by the time that any mine would be ready for production, right? by the time that any mine would be ready for production, right? Tesla has put out an electric car that does not use nickel in the battery. And that's done like really well. And CEO Elon Musk has said that he's kind of feeling like he's got some concerns about the availability of nickel anyway. So like maybe nickel-free batteries are kind of the way to go. Right, who knows if the minerals will even be that useful soon. Yeah, exactly. We could build a road and get a mine approved. And by the time all of that is

done, we might not even need what's there. And that's a real problem. I don't think that any of these things are as certain as some people say they are. I mean, this was really interesting. Thank you for this. Thank you. Thanks for having me. All right, that is all for this week. Front Burner was produced this week by Imogen Burchard, Derek Vanderwyk, Simi Bassey, Ali Janes, Ashley Fraser, Bryce Hoy, and Ruxar Ali.

A big thank you to Ben Andrews for giving us the idea for the show today. Our sound design was by Matt Cameron and Sam McNulty. Our music is by Joseph Chabison. The show was executive produced this week by Imogen Burchard and Ali Janes. I'm Jamie Poisson. Thanks so much for listening. Talk to you next week.