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A mining exploration camp in the Ring of Fire, James Bay Lowlands, Northern Ontario Canada, 2015.Garth Lenz. 938 Collinson Street, Victoria, B.C. V8V 3B8./The Globe and Mail

The federal government is proposing to advance up to $40-million in new funding for Ontario’s Ring of Fire, in an effort to boost development in one of the highest profile critical-minerals projects in the country.

Natural Resources Minister Jonathan Wilkinson, in a May 17 letter to George Pirie, Ontario’s Minister of Mines, said that Ottawa is prepared to advance the funds to help the province and First Nations conduct feasibility and sustainability initiatives, economic analysis and other predevelopment work.

Mr. Pirie wrote in an e-mail to The Globe that Ontario, through its pledge to fund $1-billion in costs for a proposed road into the Ring of Fire and other related infrastructure, is already exceeding the federal government’s financial commitment.

Located 550 kilometres north of Thunder Bay, the undeveloped Ring of Fire region has been touted by Ontario Premier Doug Ford as an essential piece of the province’s plan to become a global player in battery metals.

In the past few years, the Ring of Fire has taken on added importance as the Canadian and U.S. governments have vowed to build up North American supplies of critical minerals in an effort to challenge China’s dominance.

Mr. Wilkinson, in the letter to Mr. Pirie, also proposed setting up a working group between various federal government ministers and their Ontario counterparts to “formalize and advance dialogues on the feasibility and sustainability of opportunities” in the Ring of Fire.

“I recognize that the Government of Ontario has identified the Ring of Fire mineral region as an opportunity for a corridor to prosperity that can leverage health, economic and social benefits, while unlocking significant economic growth.

“The Government of Canada also recognizes this region as holding important critical-mineral deposits that could support the development of value chains in strategic industries and facilitate economic prosperity in partnership with Indigenous Peoples,” Mr. Wilkinson said.

Keean Nembhard, press secretary for Mr. Wilkinson, wrote in an e-mail to The Globe that a similar letter was sent to each of the affected First Nations communities.

The federal government has historically been less bullish on the Ring of Fire and has said that various environmental studies that are under way must be completed to make sure that impact on the land and waterways is acceptable. Ottawa has also made it clear that Indigenous groups must be on board with development.

While several Indigenous groups, including Marten Falls First Nation and Webequie First Nation, are broadly in favour of development, Neskantaga First Nation is opposed and has argued that it has not been adequately consulted.

Since 2006, various mining companies have spent hundreds of millions of dollars in the region, but no mines have been built. The Ring of Fire has no roads or electricity, and it is situated in a giant swamp.

Originally promoted for its chrome deposits, in recent years attention has turned to the Ring of Fire’s nickel deposits. Alongside cobalt, lithium and graphite, nickel is a key component used in electric-car batteries.

The most promising mineral deposits in the Ring of Fire are owned by Australian private equity company Wyloo Metals Pty Ltd.

Perth-based Wyloo hopes to put its Eagle’s Nest nickel project into production by the end of the decade, but it needs both the Ontario and federal government to build a $2-billion all-season road that would connect Eagle’s Nest to the provincial highway network, some 300 kilometers to the south. While Ontario has pledged to pay half the cost, Ottawa remains on the fence.

Wyloo hopes to produce nickel to feed future electric-car battery factories in the southern part of the province.

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