Ahki

Ring of Fire A Story Of Lost Opportunity

Remember the excitement and promise of the Ring of Fire? That’s the huge mineral deposit of chromite, nickel, gold, copper and platinum that was discovered in 2007, five hundred kilometres northeast of Thunder Bay.

Four years ago, I predicted the discovery of the Ring of Fire could generate an estimated $1 trillion in economic development in Northern Ontario. Its potential rivals that of the oil sands. It could mean tens of thousand of jobs for decades to come throughout the region.

Former Tory Treasury Board Chair, Tony Clement, called it an “economic game changer for Canada.” Former Ontario Premier, Dalton McGuinty, said it was the most promising mining opportunity the country has seen in a century. Premier Wynne vowed to spend $1 billion on a transportation corridor to the mineral deposits and isolated native communities.

Cliff Natural Resources, a U.S. mining giant, announced a $3.3 billion investment in the extraction and processing of the chromite, used to make stainless steel. It included a $1.6 billion smelting plant in the Sudbury area.

Chromite and other mineral prices were high. The social and economic prospects were promising. But instead of showing leadership to advance this massive project, the provincial and federal governments delayed, bickered and played politics.

The current state of the Ring of Fire is a story of lost opportunity.

So far, Queen’s Park and Ottawa haven’t spent a cent on the infrastructure needed to access the mineral deposits. Not one shovel in the ground.

Of the $1 billion Ontario has promised, only $20 million has been spent, all of it on consultant’s fees and staff salaries for the province’s Ring of Fire Infrastructure Development Corp. (ROFIDC). The corporation is led by a board of directors made up of Queen’s Park bureaucrats.

Information That Matters 7 Days A Week 24 Hours A Day!
 
HomeStocksFinancePersonal FinanceBusinessReal EstateMiningJobs
 

Last year, Wynne said in Thunder Bay, “That billion is real and it’s going to go to building Infrastructure.” But the Liberal’s most recent budget shows the $1 billion in funding won’t start until 2018-19, a year after the next provincial election.

In 2014, Cliff Natural Resources pulled out of the region after spending $550 million on development rights for three chromite deposits. They cited the government’s failure to proceed with the needed transportation access to get the minerals out. The ultimate embarrassment came when junior mining company, Noront Resources Ltd., bought Cliff’s stake for the deeply discounted sum of US$27.5 million.

The provincial auditor, Bonnie Lysyk, in her 2015 report, criticized the Wynne government for what she called a pattern of inaction to develop the Ring. She pointed to missed deadlines and lack of performance measures. She’s also concerned about the $500,000 spent setting up the ROFIDC, and its annual cost of $4 million.

Access to the mineral sites also means access to jobs and the outside world for some of the poorest, most isolated aboriginal communities in Canada. Last month, Ontario First Nation Leader Isadore Day stressed the importance of getting on with the transportation corridor.

“With the full consent of the First Nations, we need to conclude studies, and simultaneously put shovels in the ground. Imagine the spin off economic benefits of all-season roads, from responsible development, to tourism, fishing and hunting,” she said.

Wynne has used the reluctance to commit funds of the former government of Stephen Harper as an excuse to hold back spending the province’s promised $1 billion. She had hoped her support of Prime Minister Justin Trudeau might mean federal funds. But the Liberal election platform failed to mention the Ring of Fire, and their first budget didn’t earmark any infrastructure money for the project.

Exploration companies in the region face a Catch 22. They can’t raise money to extract the minerals unless they can show banks and investors a way to move them to market.

The province’s inaction has kept that door closed.

One Canadian exploration company, KWG Resources, is so frustrated with government delays it have entered into an agreement with China Rail Construction. This major Chinese rail group is studying design and financing options for building a railroad to KWG’s chromite deposits. According to KWG, “They see the whole picture and want to participate in all aspects of the project, not just rail.”

Despite the current drop in chromite and steel prices, there may be other Canadian and international players who think long-term and would be interested in financing access to the area. If the Wynne government is still hesitant to directly fund the needed infrastructure, they should at least fully explore private investment.

This means consulting with all the stakeholders to establish the right socio-economic requirements. Then, issue a Request for Proposal inviting private consortiums to bid on designing, building and financing the corridor (rail or road) in return for a portion of the revenue streams it creates. This will determine whether or not a business case exists for the development of the Ring, and what role Queen’s Park has to play to make it happen.

The illusive $1 billion promise has been dangled in front of the people of Northern Ontario for long enough. Either start building the corridor, or invite the private sector to play the lead role.

R. Michael Warren is a former corporate director, Ontario deputy minister, TTC chief general manager and Canada Post chief executive.



 
Ads By Google
 
Information That Matters 7 Days A Week 24 Hours A Day!
 
HomeStocksFinancePersonal FinanceBusinessReal EstateMiningJobs
 

Related Articles

Ahki Social Media Links

Post A Job – Ahki Jobs – Find A Job

Post A Job - Ahki Jobs - Find A Job

Ads By Google

Ahki Jobs Syndication

Cyber Hacking & IT Security News

Ahki Cyber Hacking & IT Security News

Post A Job – Ahki Jobs – Find A Job

Post A Job - Ahki Jobs - Find A Job

Shop Online At Ahki Apparel

fno.logo

Ads By Google

Buy Gold Silver & Palladium

Ahki Gold Silver Platinum And Palladium

Ads By Google

Contribute To Ahki

Search Ahki

Back To The Top of Page

ahki.logo