Cliffs Natural Resources Inc. announced in June it would suspend environmental assessment work at its Black Thor chromite project in Ontario’s Ring of Fire, saying that several uncertainties had to be resolved before it could justify further spending.
“While most aspects of the chromite project have advanced according to plan, temporarily suspending the environmental assessment work acknowledges that
certain critical elements of the project’s future are not solely within our control and require the active support and participation of other interested
parties such as government agencies and impacted First Nation communities,” said Bill Boor, Cliffs’s senior vice-president of global ferroalloys. “We
remain excited about this project and its potential for Cliffs and northern Ontario. However, given the current unresolved issues, we cannot and will not
unilaterally move the process forward and must manage our resources appropriately.”
The mineral-rich Ring of Fire region has almost no existing infrastructure, and the companies exploring there require government assistance to develop
their projects. Despite enthusiasm from the province, Boor said it has proven harder than expected to hammer out the details of an agreement covering
critical questions like access to electricity, power rates, and the financial burden of building transportation infrastructure.
Meanwhile, at the time of its decision, Cliffs was awaiting approval by Ontario’s Environment Ministry on the terms of reference for its environmental
assessment, a decision by the province’s mining and lands commissioner on an easement needed to build its planned access road, and the next phases of a
judicial review filed by the Matawa First Nations in 2011 to force a more rigorous assessment of the project. Boor said any one of these issues alone could
have justified Cliffs’s decision. “The announcement was an attempt to explain to everyone that we’ve got to get moving,” he said.
Despite Cliffs’s frustration, Michael Gravelle, Ontario’s northern development and mining minister, expressed confidence in the existing process: “This is
a transformational project. It’s important that we recognize that taking a little more time to get this right is as important as anything else.”
He refused to speculate on a future without Cliffs’s involvement in the Ring of Fire. “Cliffs has made it clear they’re committed to the project,” Gravelle
said. “Based on my own conversations with them, I’m confident that we will be able to move forward.”
Ontario had already promised to help fund a proposed north-south access road built by Cliffs and available to Noront Resources on a toll basis. The
environmental assessment Noront will submit for its smaller Eagle’s Nest nickel project in August or September incorporates an alternative westward road
rejected by Cliffs as unviable for its chromite ore project. Neighbouring First Nations prefer the westward option because it links up more communities
while crossing fewer major rivers. Asked whether the province would commit financial aid to Noront’s alternative, Gravelle said, “It’s too early to have
that kind of conversation.”
If the torch were passed to Noront, the company and its shareholders would be prepared to take it and run with it, according to Paul Parisotto, chairman
and interim CEO. “We have to have plans in place in the event that Cliffs doesn’t proceed with its project for whatever reason,” he said. “And we are
extremely confident that we can proceed with our plans to develop the Ring of Fire.”
When asked about these developments, Kirk McKinnon, president and CEO of junior explorer MacDonald Mines, worried that investors would lose interest in the
Ring of Fire without decisive leadership from the provincial and federal governments. All types of infrastructure proposals – ranging from obvious to
creative – are on the table, including a railway that an organization of northern Ontario transportation unions proposes to build under the auspices of a
port authority. Any option would help MacDonald Mines; the urgent need, argued McKinnon, is to pick one infrastructure option and finance it.
But the local First Nations’ fight for more inclusion and input into the road’s environmental assessment process – including community hearings in their
own languages – will likely impact such decisions. Ontario and nine First Nations, represented by the Matawa Chiefs Council, have agreed to broad regional
strategy negotiations that could rewrite the environmental assessment requirements for Cliffs and future projects.
Both Cliffs and the First Nations expressed hopes for a mutually satisfactory agreement that could circumvent the judicial review wending its way through
court. Judith Rae, a lawyer working on the judicial review, said: “Whether we can get a negotiated outcome will depend on, one, government willingness to
change the environmental assessment process, and two, industry willingness to work with a new environmental assessment process. The problem is that we
don’t know the answers yet.”
Project proponents may take some comfort that in July the province gave the task of leading its negotiating team to Frank Iacobucci. The appointment of the
former Supreme Court justice follows Bob Rae resigning as a member of Parliament to devote his energies to leading negotiations for the Matawa Chiefs
Council. “In my opinion, something must be happening, because he wouldn’t be resigning to take on that role if nothing was going to happen,” said McKinnon.