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Ring of Fire (RoF) News – December 18, 2014

  • Ontario asks (again) …. “The province has formally asked for the federal government to match its $1 billion commitment to Ring of Fire infrastructure.  Provincial Minister of Northern Development and Mines Michael Gravelle and federal Minister of Natural Resources Greg Rickford still haven’t spoken since Rickford called out the province in the House of Commons last month saying its much-touted $1 billion commitment wasn’t actual policy.  But last Thursday Gravelle sent Rickford a letter saying that the province has submitted its application under the federal government’s Building Canada fund to get Canada to match the figure. Gravelle said the ask, formally submitted by economic development minister Brad Duguid, was very detailed.  “There have been many detailed discussions about it beforehand as there will be afterword,” Gravelle said. “Certainly the federal government is very familiar with the project. They’re very familiar with the infrastructure needs.”  Ontario is eligible for around $2.7 billion under the fund. But the province chose instead to try and access the $4 billion unallocated so far and set aside in the fund for national infrastructure, something Gravelle said the federal government needs to recognize ….”
  • …. and Canada responds – with a bit of a threat thrown in  “Ontario’s plan for the remote Ring of Fire mineral deposit has “serious structural problems” according to the federal Natural Resources Minister, and that’s why Greg Rickford says Canada is cautious about partnering with the province to build roads and power lines …. He outlined what he describes as three key structural problems with Ontario’s approach that “only the province can resolve.”  The slow pace of talks with First Nations on “own source revenue” also known as resource revenue sharing – “They have a mandate to negotiate a mandate to negotiate,” Rickford said; The Ontario Mining and Lands Commissioner’s intervention on the potential north-south transportation route – “It shouldn’t have even come to a decision anyway, but that stifled discussions around any road options that could also serve as electricity corridors,” he said;  The makeup of the Ring of Fire Development Corporation – Rickford said the federal government would be “loathe” to invest money “to park it in a development corporation that Ontario senior bureaucrats would administer… That’s not an option for us, it’s not an option for the First Nations, it’s not an option for the private sector.”  It is possible for a mining company and a First Nation to partner on a proposal to the Building Canada Fund without the province, Rickford said.  It would be “unfortunate” if the province were cut out of the opportunity to play a key role in the development but “we’re not far off of that place,” he said ….”
  • More detail from Rickford:  “…. Despite several announcements, no one knows anything about the Ring of Fire development corporation beyond the fact that so far its board is made up of four senior provincial bureaucrats. It cannot be a policy option and will not be until stakeholders have at least seen how it’s going to work Rickford said. “Let’s get this straight. Neither the federal government, any of the private sector companies and importantly the First Nations communities have seen any documents, not articles of incorporation, not policy position statements on what the devco would do except administer all of this money that we would apparently pour into it,” Rickford said.  “We don’t drop off money into a devco where we don’t have any ability to even so much as sit on its board and have a decision making capacity. That’s not an option for us.” “
  • Still, it looks like a meeting’s coming between Rickford and Gravelle:  “High-level government talks on infrastructure development in the Ring of Fire mining area are imminent.  Federal Natural Resources Minister Greg Rickford said Wednesday that he will be discussing Ring of Fire infrastructure projects with (Ontario’s) Northern Development and Mines Minister Michael Gravelle in the new year.  Rickford said he was pleased to get a letter last week from Gravelle requesting the meeting.  “We see this letter as a positive signal that the province is interested in joining the federal government, First Nations and industry in a more refined discussion on what we feel is important (infrastructure development) in the RoF,” said Rickford.  “Gravelle’s letter, in short, sends a strong message – we can now all work together on a proposal to the Building Canada Fund.  This letter means the RoF is a priority for the provincial government and they are willing to move forward on specific projects ….”
  • Commentary on the federal-provincial RoF tug o’ war  “…. The issues between the Ontario and Canadian governments appear to be a combination of political direction, and personalities. That could include a cup of political ideology in the recipe that is making the end result for the Ring of Fire a more bitter recipe for Northwestern Ontario …. This impasse is happening, and seemingly, left on the sidelines are the mining companies who are watching the value of their investment slowly drip down the drain.  Activity in Northwestern Ontario’s mining sector needs more action. Without the active engagement of governments, it is likely that getting the Ring of Fire going will take a lot longer than proponents will be able to wait.”
  • More on resource revenue sharing in Ontario, courtesy of page 30 of this Prospectors and Developers Association of Canada report (PDF):  “…. There have been some initial negotiations on GRRS planning in the Ring of Fire, located in northern Ontario. In 2012, the Minister of Northern Development and Mines updated a Memorandum of Co-operation (MOC) with Webequie First Nation to discuss providing Webequie with “social, community and economic development supports and resource revenue sharing associated with mine developments in the Ring of Fire.” Additionally, in July 2013, the Ontario government appointed the Honourable Frank Iacobucci as the lead negotiator for Ontario to participate in discussions with the Matawa member First Nations related to proposed development in the Ring of Fire. Consideration was given to resource revenue sharing, along with environmental monitoring, infrastructure and economic supports.  In March 2014, the parties signed a framework agreement  o guide negotiations on these issues ….”
  • “Noront Resources Limited President and CEO Al Coutts is looking to get mining. The Noront President says that getting moving on the Ring of Fire is important for Ontario. Coutts shares in an interview with NetNewsLedger, what is key is for Ontario to move forward on the permitting process, while it is working on the Regulatory Framework Agreement. The Ring of Fire chromite discovery in Northwestern Ontario offers opportunity for the region. “Getting the Ring of Fire right,” has been the message from the province of Ontario and Minister of Northern Development and Mines Michael Gravelle. Often it is the quiet player who is the one to watch. In the Ring of Fire, Noront Resources has been quietly doing things right ….”
  • One analyst’s take  “Cliffs Natural Resources: Time To Be Bearish Again? — Cliffs Natural Resources shares remain under pressure despite the fact that iron ore prices have recently stabilized. Clearly, the overall bearish outlook for iron ore prices weighs on the company’s valuation ….”
  • Another analyst’s take  “If You Believe In Cliffs Natural Resources, Consider The Preferred Shares …. The share price of Cliffs Natural Resources has declined substantially lately.  However, if you believe in the company, there is an interesting value proposition being offered in the form of equity designation you choose ….”
  • Environmental group, worried about caribou habitat, (again) calls for “regional strategic environmental assessment” in RoF area:  “In Ontario we’re particularly concerned about a proposed 300km transmission line designed to supply power from Ignace/Dryden through high-risk caribou ranges to Pickle Lake; the five-year exemption for forestry activities from the Endangered Species Act; and active discussions of plans for roads, hydro lines and other infrastructure to allow industrial access to the Far North including the Ring of Fire,” said Anna Baggio, Director, Conservation Planning for CPAWS Wildlands League.”  National news release here, full report here (although it doesn’t mention RoF specifically)
  • Interesting, but not ENTIRELY surprising …. “For the first time, the amount of money northeastern Ontario First Nations receive from agreements with private resource companies has been made public.  The figures were included in financial documents posted under the new First Nations Transparency Act.  Many bands have been reluctant to discuss specific figures in the past and the impact benefit agreements often prohibit the companies from discussing payment to neighbouring First Nations without band permission …. Most First Nations in northeastern Ontario do get some amount of money from a mining, forestry or power company.  All of the bands along the James Bay Coast receive money from DeBeers, for its Victor diamond mine near Attawapiskat ….”

 

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