Andrew Forrest, the Australian billionaire owner of the most promising mining assets in Ontario’s Ring of Fire region, says the viability of the critical minerals project is at risk because of Canada’s regulatory burden, its cumbersome consultation process and persistent delays in building crucial infrastructure.
The Ring of Fire, in the province’s far north, is a key part of Ontario’s and Canada’s plans to become a player in metals for electric-vehicle batteries, but it has sat undeveloped for the better part of two decades owing to unproven economics, tension with Indigenous communities, a lack of political consensus and the gigantic capital cost requirements.
The project has taken on added importance over the past year, as the Canadian and U.S. governments have vowed to build up North American supplies of critical minerals in an effort to wean themselves off supplies from China amid national security concerns.
Opinion: To develop Ontario’s Ring of Fire, we must develop trust with First Nations
Originally promoted for its chromite deposits, in recent years attention has turned to the Ring of Fire’s Eagle’s Nest nickel project. Alongside cobalt, lithium and graphite, nickel is a key component of EV batteries.
In a letter to Prime Minister Justin Trudeau in December, Mr. Forrest warned that Eagle’s Nest and its associated battery metals plant are in peril, owing to the glacial pace of development in Canada.
“Timelines to advance environmental assessments, permitting and construction of the infrastructure corridor and Eagle’s Nest, as well as far-reaching consultation requirements are placing the viability of the project at risk,” he wrote.
“If these standard processes continue without amendment, there is no prospect of commencing development of the Ring of Fire, or of the battery metals plant, before mid- to late 2030s.”
Perth-based Wyloo Metals Pty Ltd., which is controlled by Mr. Forrest, last year acquired Ring of Fire Metals (then Noront Resources Ltd.) in a bidding war for $617-million.
In the letter to Mr. Trudeau, he raised the spectre of Wyloo possibly abandoning the Ring of Fire, saying that “investment will be difficult to sustain” if the delays continue. He called on Mr. Trudeau to take “decisive government action.”
Mr. Forrest was not available for comment.
Keean Nembhard, press secretary for Jonathan Wilkinson, federal minister of natural resources, wrote in an email to the Globe that Canada’s permitting process is already ahead of many of its global peers with respect to environmental protection, Indigenous consultation, and timelines. He added that that the federal government is committed to a regulatory system that enhances Canada’s global competitiveness, while protecting the safety of Canadians and the environment.
In Canada, mining and infrastructure projects generally require both federal and provincial environmental reviews, as well as permits from both levels of government, a process that can lead to a duplication of effort.
Six provincial and federal environmental studies are under way into the proposed construction of roads into the Ring of Fire. None are anywhere near being approved. An additional federal review that proposes to look at how mining development will affect the entire region was ordered in 2020, but so far stakeholders have been unable to even reach agreement on its terms.
Natural Resources Canada acknowledged in its critical minerals strategy last year that getting a Canadian mine into production can take as long as 25 years, far longer than in other major mining jurisdictions such as Western Australia. Ottawa vowed to find ways to speed up the process.
The federal government said in its budget in March that by the end of the year it will come up with a plan to improve the efficiency of environmental impact assessments and permitting, including “clarifying and reducing timelines, mitigating inefficiencies, and improving engagement and partnerships.”
Ottawa also committed $10.6-million for critical mineral developers to navigate red tape and $40-million to support northern regulatory processes.
Mr. Nembhard said that the federal government is also looking at entering into more equivalency agreements with the provinces that would reduce duplication in environmental assessments by conducting a single study for a mining project, as opposed to two. Ottawa already has such an agreement in place with British Columbia.
Mining projects also require extensive consultation with affected First Nations communities. Because the Ring of Fire project encompasses such a large area, many communities are involved and reaching consensus has been impossible so far, despite more than a decade of consultation that started under then-premier Dalton McGuinty, continued under Kathleen Wynne and has since passed to Doug Ford.
Mr. Ford, who appointed a former mining executive as his Mines Minister last year, has at times angered Indigenous communities in the region, vowing repeatedly that development in the Ring of Fire will move ahead even if he has to jump on a bulldozer himself to get it going.
While some communities, including Marten Falls First Nation and Webequie First Nation, are in favour of development, several others are opposed. Two senior leaders of Neskantaga First Nation were escorted out of the provincial legislature in March after shouting at Mr. Ford and accusing him of failing to adequately consult on Ring of Fire development.
Since 2006, various mining companies have spent hundreds of millions of dollars trying to open up development in the region, but no mines have been built. While permitting and red tape are part of the problem, the gigantic costs of development have also been a huge stumbling block.
Located 550 kilometres north of Thunder Bay, in dense boreal forest, the Ring of Fire lacks basic infrastructure such as roads and electricity. In addition, it is situated in swampy terrain and muskeg. Indigenous groups and environmentalists have concerns about disturbing the muskeg because it acts as a giant carbon sink.
Wyloo needs the provincial and federal governments to build a $2-billion all-season road that would connect Eagle’s Nest to the provincial highway network, some 300 kilometres to the south. The province has committed the funds, but Ottawa remains on the fence and has stressed that development won’t go ahead without the First Nations on board and environmental concerns being addressed.
The Globe reported last week that Ottawa has proposed an additional $40-million in funding for the Ring of Fire and wants to set up a working group of federal government ministers and their Ontario counterparts to “formalize and advance dialogues on the feasibility and sustainability of opportunities” in the Ring of Fire.
The working group will also include 19 affected Indigenous communities.