The Decibel - The promise and problems with Ontario’s Ring of Fire

Episode Date: January 16, 2024

Ontario’s Ring of Fire has long been believed to contain critical minerals like nickel, copper and chromite, purportedly worth tens of billions of dollars. But for more than a decade, there has been no development. This is in part because of a long process of assessments and consultations happening, much of which involve First Nations communities who live on the Ring of Fire land.Niall McGee is the Globe’s mining reporter and he explains how the leader of one First Nation in the area is pushing to allow for the mining of the Ring of Fire and why he sees it as important for reconciliation.Questions? Comments? Ideas? Email us at [e-mail]

For over a decade now, we've been hearing about a huge swath of land in northwest Ontario called the Ring of Fire. Mining companies say there are vast amounts of minerals like nickel, copper and chromite buried underneath that boggy, remote landscape. And when I say remote, I mean remote. The Ring of Fire is about 500 kilometers north of Thunder Bay, which means there's not a lot of infrastructure, no road to get there, no electricity, no access to safe drinking water. Both the government of Ontario and the federal government are looking to develop the region. But before they can do that, they have to consult with dozens of First Nations who live on the land, including one called Martin Falls.

Mining reporter Niall McGee is joining us today to talk about the promise of the Ring of Fire to Martin Falls, despite the fact that not everyone in the region wants this development to happen. I'm Manika Raman-Wilms, and this is The Decibel from The Globe and Mail. Niall, thanks for being here. Great to be here, Manika. So, Niall, you actually had a chance to visit Martin Falls First Nation, which is one of the First Nations in northwestern Ontario that's near the Ring of Fire. What was it like there?

I mean, it's really remote. From Toronto, you jump on a plane to Thunder Bay, and then it's another plane, a little small plane that will take you about 400 kilometers even further north. And when you land there, yeah, I was definitely struck by the remoteness. And you literally are cut off because it is fly in, fly out for 11 months of the year. I was struck by the beauty. It's on the banks of the beautiful, mighty Albany River, which is one of Ontario's longest river. And the people were lovely. And I think the people are lovely is notable because they're going through so many seemingly attractable social problems.

So like a lot of First Nations, they have still problems with youth suicide. They have very, very high unemployment. And there's also a terrible housing crunch. One man that I spoke to, a Martin Falls member, there's 16 people in his house, so three generations, because they just have nowhere else to live. How many people live there? So on reserve, there's about 280. Martin Falls members, there's about three times that amount in total. Most people live off reserve. There aren't really jobs there for the most part, at least not a lot of jobs. Generally, people, if they want to improve their lives, for the most part, have to leave the reserve and live somewhere like Thunder Bay, Jerton, or anywhere else in the world they may choose to live.

And the chief of Martin Falls First Nation is Bruce Acheney-Pinescombe, and he's actually one of the most vocal proponents of developing the Ring of Fire. So now, what does he say he sees in that development? So development would also entail a building of an all-season road into Martin Falls. And that would improve the life on reserve considerably because it's much cheaper to truck goods into the store, the one store that's in the community, than fly in. You can fly in building materials. So the real estate problem will get a lot better. And people just have general better mobility, you can get in and out a year round, and you don't have to save up for for a plane ticket. Mining itself, that's

another matter. The reason the chief is broadly in favor of mining is because it's an economic opportunity. Unemployment is high, there's societal problems. And he believes that on balance, developing the Ring of Fire will bring more jobs, more economic opportunities to the community. So in a way, I mean, are some people seeing this as kind of like a form of economic reconciliation even? Absolutely. That's actually a great way to put it, because there's deep history here.

The community signed a treaty with Ontario in 1905, so they basically gave up almost all of their traditional territories and agreed to live in a very constricted small space of land called the reserve in return for revenue sharing and riches from resource development. And unfortunately, up to now, Martin Falls has received almost zero or really zero from that. The chief told me that rivers around the area have been dammed since the 60s, so lots of benefits flowing to private corporations and sometimes public corporations,

but nothing really coming back to the community. So this is an opportunity, finally, for some economics to come back from resources that are situated on traditional territories of Martin Falls. And Martin Falls really has the most to gain compared to a lot of other First Nations communities that are being consulted as part of the Ring of Fire development talks, both on the road and in terms of possible future mining,

because they would potentially get a road into the community. There are other First Nations that are on the fence about development. They don't have as much to gain. There's no, for example, road that's being proposed into Niskanika, which is a First Nation that is broadly opposed to development in the Ring of Fire. More broadly, though, Niall, what is the promise that others, like I'm thinking like mining companies and politicians, what do they see in the Ring of Fire?

That's a really loaded question because there's a lot of history there. Politicians, I think it's fair to say, have been pretty irresponsible in the way they've talked about the ring of fire forever. And forever really means since 2012, since Dalton McGinty really got behind development. So when I first started reporting about the Ring of Fire around 2019, there was this figure of $60 billion that was in the zeitgeist. This is how much the economic potential was. And I actually spoke to the geologist who came up with that, as he calls it, back-of-the-envelope calculation.

And he told me that, oh, jeez, I'm so annoyed that people are using the $60 billion figure. It's completely irresponsible because it's based on the value of the metal in the ground. The mining industry doesn't care about how much the metal is worth in the ground. It only cares about profits. So he had pointed out that there's no proof, really, that these metals can be extracted economically. But despite my best efforts at educating the public, the politicians have only become more bold over the years. And George Peary, who's Ontario's mining ministry, recently told Global News that the value of the Ring of Fire is $1 trillion.

And the mining company, which is called Wailu, they're an Australian company, when presented subsequently with the $1 trillion sort of scoffed and said, I'm paraphrasing a bit, but they sort of said, yeah, that's really unrealistic, Mr. Peary. Believe me, there's no feasibility study in the Ring of Fire that shows a you said $1 trillion is kind of a ludicrous figure. Do we actually know how much the minerals in the Ring of Fire then are worth? Like how much it would be worth to develop? So we don't have an exact figure in terms of a dollar amount, but the company is currently doing an updated feasibility study. The previous owner, Norrent Resources, did a feasibility study in 2012. And back then, they predicted that if this mine was developed, it would probably run for about 12 years.

And the grade of nickel was high. So under normal circumstances, this is a mine that would be developed by the mining industry. The issue, though, in many cases, is infrastructure. It's currently impossible to get the ore out because there's no road in or out of the Ring of Fire. So the company, which is Wailu Metals out of Australia, they need the taxpayer to build the road because if the company builds the road, there's no return and it would not make economic sense. Okay, so there's one thing about like actually doing the physical mining, but as you're saying, there's all this infrastructure that needs to be built in order to get there in the first place then. Yeah, absolutely. At a minimum, roads into the ring

of fire need to be constructed because there's no point in having a nickel mine if you can't get the product to market. And there's also, of course, lots of other infrastructure that needs to go in along the road. This is a very swampy area with lots of rivers, you need to build bridges. It would be a significant engineering challenge. There's also environmental issues because much of the road is situated in a giant carbon sink. Okay, so it sounds like that is maybe the hold up a little bit here. Just to be clear, is there any mining that's actually taking place right now in this area now? There's no mining going on right now in Manicou.

Okay. All right. So it sounds like this is predicated on the fact that the governments are going to fund a road to get in here and then the company can start mining, assuming that the money from the government materializes, which of course is not a guarantee, but let's just say it is for a moment. When might we actually see some sort of functioning mine in the Ring of Fire? So the earliest estimate for the road being finished, which would be the point at which it would make sense for the company to also start mining, is around 2035. So it's a really long timeline. And part of the reason for the timeline is in the Canadian mining industry,

there's a lot of red tape. There just is. That's kind of how it is. But there's also significant consultation steps that have to happen with the First Nations. And those studies take years. And there's also funding. The government has to come up with the funds and agree to advance the funds. And the company itself has to decide at some point, yes, this is economic, we want to proceed, the company has to put in a mining application to the province of Ontario, that's not even happened yet. Wow, okay. So even if everything goes perfectly, right, nothing's actually going on until 2035. And so that's probably a very, very early estimate might be even longer than it could be longer. And quite often in the mining industry,

unfortunately, things often do end up being longer. We're also dependent on commodity prices, which go up and down. And currently, the nickel price is actually quite low, certainly a lot lower than it was about a year ago. So if the nickel price continues to fall, there's no guarantee the company will actually go ahead on the project because the company needs a pretty high nickel price as well. We'll be right back. All right, so there's this complicated history around the Ring of Fire. Still lots of questions about how much it would actually be worth. But now let's come back to Martin Falls First Nation.

What kind of say does it and other First Nations in the region have when it comes to approving or vetoing the development of the Ring of Fire? So First Nations in Canada have a lot of power, especially when you compare them to indigenous groups in places like Australia. So they have rights under the Constitution to be consulted on every major resource project that's proposed. And in this particular case, Martin Falls is leading an environmental study into the construction of all-season roads, which is the vital piece of infrastructure that a mining company needs. So they really have a lot of say here. They're overseeing all of the studies that are going on. But there's about two dozen First Nations groups in total that are being consulted as part of the process. You asked about a veto. They do not have veto power. So ultimately, the province of Ontario would decide whether the project is a go or not. And they could

in theory, decide to advance the project even if First Nations are opposed. The federal government also has a say in terms of the approval process, but the same thesis applies. The province and the federal government have the ultimate say, and there's no veto with First Nations. So in this case, if the governments have the ultimate authority, the ultimate say here, how important is it actually for the First Nations to be on board with this development? I'd say it's absolutely critical. Most people would find it very unlikely that especially a federal government would bless this project if most First Nations weren't in favor of the Ring of Fire development. In fact, the federal government is very clear that it really needs most First Nations, if not all of them, to be on board. The government of Ontario, I would say the signs are a little bit less clear.

Would Ontario approve the project if most First Nations were opposed? Some people would probably argue they would because they're so pro-development. But even that would be hard to see because then you would have the potential for protests and injunctions and blockades. And there's plenty of evidence of that happening in resource projects in Canada where First Nations are not in favor. And when it comes to developing the roads and infrastructure, like is that something the province would foot the bill for them, the taxpayers of Ontario? So Ontario really from very early on has said that it's willing to pay about half the cost of the road. They've said on numerous occasions, we'll spend $1 billion, so half the projected cost, and they've called on the federal government to match those funds. If you believe them on their words, yes, they've said they'll spend half.

The federal government is the stakeholder that hasn't weighed in definitively either way. So the province, it sounds like the province would want the federal government on board because the federal government would be paying a lot of money for this infrastructure. Yes, absolutely. And the real subtext here is they'll make up their mind eventually, but you need to have indigenous buy-in. So back to Martin Falls now, we know that the Chief would like to see the Ring of Fire developed, but what about the rest of his community? I'm wondering about everybody else there. Yeah, so it's pretty mixed. I mean, you will get all manner of opinion on the Ring of

Fire. And even, I mean, even the Chief himself is somewhat conflicted. The Chief has reservations, of course, and he's sort of said, yes, we're probably going to have some pretty bad environmental impacts from development, but broadly I'm in favor. I spoke to Elder Elizabeth, who's Chief Bruce's mother, and philosophically, she's pretty similar to Chief Bruce. She has concerns, especially about an Australian owner of the Ring of Fire mining assets. She pointed out to me in an interview that the Australians, by and large, do not have a great reputation with their relations with Indigenous. So she's keeping a very close eye on the Australian owner. But on balance, she also is in favor because she thinks that it's just a way for people to have a livelihood and determine their own destinies. And then on the complete other end of the spectrum, I spoke to a young woman who's really

a Martin Falls member who's sort of bucking the trend. I mentioned earlier that most members live off reserve. She's very well educated. She finished her university education and she decided to move back to the community. And she asks about, well, development sounds good, but we maybe have neglected our relations with other First Nations that are on the fence. That worries her. And she also asks about, well, how are we actually going to benefit if people here aren't qualified? So why aren't we training more people that can actually work in this mine if the mine ever happens? Yeah, these are all concerns to think about, for sure. We talked about this in general terms now, but maybe we can be specific. Do we know what exactly Martin Falls would get if the Ring of Fire is developed? If six or seven years down the road, things are looking really good, and the road looks like it's going to get built, the mining company has decided it will build the mine, and it looks like they will get permission to build the mine. At that point, the mining company would start talks with not only Martin Falls, but many other First Nations in what are called impact development talks. And at that point, really, you get into brass tacks, like what specifically First Nations would receive in return for giving their consent. So how many jobs,

how many business contracts, who will pay for the training, and also royalties, potential royalties from the mine that would kick back to the First Nations. So that nitty gritty really hasn't happened yet. But it would happen if the project does indeed go ahead. And has the company Wailu said anything in particular about this, like what they would be willing to offer in these terms? Yeah, so broadly, Wailu has thrown out a figure of $100 million, which they say is the value to First Nations businesses that would be awarded if mining starts in the Ring of Fire. So that is a big figure.

But of course, there are also a lot of First Nations, but they have promised pretty big in terms of benefits kicking back to First Nations. So now we've been primarily talking about the pro-development side of things. What about First Nations who don't want to see the Ring of Fire developed? What are they worried about? Probably number one is the impact on the road development and the mine development on the environment. So things like traditional hunting, trapping, and fishing grounds. That is probably concern number one.

The other concern that you hear is the actual process itself. So Niskanika, which is a First Nation, which is not that far from Martin Falls, has said repeatedly that the process is flawed and they've not been consulted properly and they've actually taken the province to court and lost. One thing I'd also say is that depending on the First Nations, the motives and what they would gain are different. So Martin Falls and Webiqui on paper stand the most to gain because they would get these life-changing roads into their communities.

But Niskanika and many other First Nations are not being promised roads, so they have less to benefit. So in a sense, it's easier for them to be opposed to the project writ large. And it's easier for someplace like Martin Falls to be for it then. Exactly. Just lastly here, Niall, I want to come back to the vision that Chief Bruce sees. Is he at all worried, I guess, that staking a lot of hope on a development that has failed to deliver on any of its promises? Like this is a big hope for something that, even if it materializes, is still quite a ways away.

There's a possibility this project never gets developed. And then if we look back at 10 years and we see, well, how much work did these communities put into this effort over the last couple of decades, and there's a real cruelty in that because these are First Nations that are dealing with lots of problems. And the last thing they really need is much more work and red tape piled onto them. And it is significant. I think he's really taken a position that it is better to be around the table and having a voice because maybe resource development happens anyway. And because technically the province could develop the project without their consent, it's better to be at the table and making your voice heard and raising

concerns and hoping that the province and the companies really listen and do this in a responsible fashion. He just believes that philosophically, that's the more intelligent thing to do. Niall, thank you so much for taking the time to be here today. Well, thank you, Manika. That's it for today. I'm Manika Raman-Wilms. Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin. David Crosby edits the show. Adrienne Chung is our senior producer. And Angela Pachenza is our executive editor. Thanks so much for listening, and I'll talk to you tomorrow.