A top Canadian federal government official has raised doubts about whether Ontario’s Ring of Fire region will ever be developed, pouring cold water on a critical minerals project that the provincial government has championed and the United States administration has expressed interest in funding.
Jeff Labonté, assistant deputy minister for lands and minerals at Natural Resources Canada, told senior leadership at the Neskantaga First Nation in a meeting on Nov. 17 that it’s possible no mines will be built in the region, and that there is no guarantee Ottawa will ever come forward with the roughly $1-billion in funding needed for development to proceed.
Mr. Labonté joined Natural Resources Canada in 1993 and is the government’s foremost expert on critical minerals.
His skepticism comes as a key environmental study in the Ring of Fire faces a multiyear delay, and during a standoff between Ottawa and the Ontario government over funding.
The Globe and Mail learned about Mr. Labonté's doubts from Dayna Scott, an associate professor at Osgoode Hall Law School, who was in the same meeting. She was there as a policy and strategic research adviser to Neskantaga, a Northern Ontario First Nation that would be affected by mining development in the Ring.
Speaking to The Globe on Friday, Mr. Labonté said a message he wanted to convey to Neskantaga about the Ring of Fire was that “it may be that projects go forward; it may be that they won’t.”
Located 550 kilometres north of Thunder Bay, the remote Ring of Fire has been touted by the Ontario government as a key part of its plan to produce battery metals domestically, of which Premier Doug Ford is among the most ardent champions.
The region’s mineral deposits were discovered in 2006. Mining companies have spent hundreds of millions of dollars since then, but no mines have been built. Completely cut off from provincial infrastructure, the Ring of Fire has no roads or electricity, and is situated in a giant swamp. James Franklin, a former chief scientist with the Geological Survey of Canada, told The Globe in 2019 that the Ring is “about the worst place you can think of” to build a mine.
Backed by Australian resource billionaire Andrew Forrest, Wyloo Metals Pty Ltd. paid more than half a billion dollars earlier this year to buy Noront Resources Ltd., which controlled several early-stage Ring of Fire mining projects. Wyloo is betting that its Eagle’s Nest project will one day produce battery-grade nickel for Ontario’s nascent electric car industry. Earlier this month, The Globe reported that Wyloo executives had met with the United States Department of Defence, which has signalled interest in providing funding for Eagle’s Nest.
Mr. Labonté told The Globe he reassured Neskantaga Chief Wayne Moonias that there is “no secret plan” between Ottawa and Washington to circumvent the Indigenous community. Mr. Labonté pointed to significant obstacles that must be overcome before any mine can be built, including lengthy consultation with First Nations about development, and various environmental studies that are years in the making and nowhere near a conclusion.
Also discussed in the meeting was the gung-ho approach the Ontario government has taken toward development in the Ring of Fire. Last year, as the pandemic raged and Neskantaga continued to face a boil-water advisory, it asked the province to extend deadlines for responses to environmental studies.
The First Nation eventually took legal action to ask for a reprieve. Neskantaga representatives told Mr. Labonté during the meeting that they were alarmed by Mr. Ford’s repeated assertions that development will go ahead in the Ring, even if he has to jump on a bulldozer himself.
Mr. Labonté told The Globe he reassured the chief that the federal government doesn’t take the same forceful approach to mining development, and that it will work with local communities and Indigenous groups and make sure proper regulatory processes are followed.
“We don’t see bulldozers and the inevitability of that … as necessarily how things are going to happen,” Mr. Labonté said.
Mr. Ford declined to comment, and referred The Globe to Ontario’s Minister of Mines, George Pirie.
Mr. Pirie wrote in an e-mail that his ministry is supporting First Nations communities through a Crown consultation process that will ensure duty-to-consult obligations are met.
The federal government hasn’t committed any funding toward the estimated $2-billion cost of building a road linking the mining camp in the Ring of Fire to the provincial highway network some 300 kilometres to the south. The road and other vital infrastructure must be in place before mining can begin. Ontario has pledged to spend almost $1-billion on roads to the region, and has implored Ottawa to step up with matching funds.
In April, the federal government earmarked $1.5-billion over the next eight years for infrastructure to support critical minerals in Canada. But Mr. Labonté told Neskantaga that the Ring of Fire is just one of many Canadian critical minerals projects that could receive funding from that envelope, and that the federal government is under no obligation to fund mining in the region.
Wyloo has been meeting with the Ontario government and Indigenous communities in an attempt to move the project along. It’s clear that the big Australian resource company would like Ottawa to proceed with more urgency.
Luca Giacovazzi, Wyloo’s chief executive, said in an interview earlier this month that it “should be a national priority to get the Ring of Fire developed.”
In an e-mail on Friday, Leanne Franco, Wyloo’s general manager of communications, added that the company “would welcome further review of federal government processes to ensure they reflect the urgency for development of critical minerals in Canada.”
But lately, instead of urgency, there have been delays. Marten Falls, an Ontario First Nation that is leading an environmental assessment on one section of the proposed road, applied for a three-and-a-half-year extension to mid-2026 in part because of the impact of the pandemic.
That environmental assessment is only one of three that are under way on the road project. In addition, there are three separate federal road studies being conducted.
In 2020, Jonathan Wilkinson, the federal Minister of Natural Resources, ordered that a larger environmental study be carried out on the way mining development would affect the entire region. That regional assessment hasn’t begun yet. None of the stakeholders have been able to reach consensus on the terms of the study.