Talks between First Nations and the Ontario government regarding development in the remote Ring of Fire area are set to start soon, now that both sides have appointed lead negotiators.
In May, the Matawa Tribal Council, which is made up of nine First Nations communities that would be most affected by potential development in the Ring of Fire, announced that lawyer and politician Bob Rae will be their chief negotiator. Rae was the leader of the federal Liberal party until mid-April, and premier of Ontario from 1990-1995. He will step down as MP for Toronto-Centre at the end of July, freeing him to work on the negotiations full time.
Earlier this month, the province named its own chief negotiator — retired Supreme Court Justice Frank Iacobucci.
While commodities prices have seen a big pullback since 2011, it might actually be a good time for such negotiations — the scope of which is yet to be defined, but will likely include investments in education and health, as well as infrastructure, and will clearly take time to conclude.
The biggest project in the Ring of Fire is the $3.3-billion Black Thor chromite project, held by Cliffs Natural Resources (NYSE: CLF) . Primarily an iron ore and metallurgical coal miner, Cliffs’ stock price and earnings have been hard hit by a rout in iron ore.
In June, Cliffs announced it was temporarily suspending the environmental assessment (EA) work on the feasibility-stage Black Thor project due to a court challenge to the EA process (brought by several Matawa First Nations communities), uncertainties regarding land surface rights, and unfinished agreements with the province regarding infrastructure in the region.
However, Rae says all the parties are still talking — and that whether it’s ultimately by Cliffs or another mining company, there will be mines developed in the Ring of Fire, and First Nations issues need to be addressed.
Rae talked to Mining Markets about the preparations, how he got involved, and what happens next.
Mining Markets: How did you get approached about this job with Matawa Tribal Council as mediator?
Bob Rae: I got a call from one of the lawyers who was advising one of the chiefs in the Ring of Fire, he phoned me several months ago to say that they’d had a meeting in January and they’d discussed the possibility of some kind of regional process to engage with the government of Ontario and potentially with the federal government and others about the regional planning process and mining development in the traditional territory of the First Nations of the tribal council. We talked about it and what was seen to be involved, what the current state of play was in the discussions and he asked me if I was interested and I said I would be interested, but only after I stepped down as leader of the Liberal party in the middle of April. Subsequent to that, I met with the chiefs and discussed what they had in mind and we’ve continued the dialogue since then.
MM: Why did you accept it — what was so interesting about this job to you?
BR: Well I had been considering a lot what I would do after I was no longer the leader of the (federal Liberal) party, and aboriginal issues have long been a real interest of mine — I’ve worked on them and in that area for quite some time and this struck me as a unique opportunity to engage in one of the big issues that we’re facing as a country and as a province. And as time went on, it became clear that I would have to devote more time to it and I wasn’t going to be able to do that and be a member of parliament at the same time.
MM: My understanding is that these negotiations are pretty unique and like you said, it’s something that the Matawa Council requested. So what exactly will you be negotiating for them?
BR: Well I think we’re going to be defining that over the next while, but the first step is to work on a framework for the discussions with the province. But the fact is that there are already a number of issues arising from the development: the need to look at infrastructure, the need to deal with the overall environmental assessment — how does one go about assessing these projects. There’s not just one mining project, there’s probably several over time, so we’ll need to think about what bodies are going to be best equipped to not only consider the proposals but monitor any ongoing work that’s being done. We’ll need to look at how we share the benefits from development to make sure that it’s more equitable than the sharing has been in the past, and to recognize that the people in the area need a lot of investment in health and in training in order to be equipped to take advantage of the potential for development.
MM: It sounds like a really big job.
BR: It is, but you just try to do it in manageable chunks — you look at different aspects of it and you just try to work your way through it.
MM: Is there a timeline to get a framework for discussions in place?
BR: We’d like to get the framework done sooner rather than later. My view is that we have to operate in real time. Obviously, there are a number of companies that are engaging with the province and therefore, if we’re going to be successful, we need to be taken seriously right away. At the same time, there’s no desire on anybody’s part to simply throw a monkey wrench into the proceedings, but we do want to be heard — and I think that’s the challenge, to create the opportunity to be heard.
MM: Does Cliffs — or any of the other companies working in the Ring of Fire — have any role in this?
BR: At the moment, not directly, but everyone is obviously in touch with everyone else — people are talking to each other. The first step is to figure out how the province and the First Nations will engage, but I think everyone recognizes that there are real implications for Cliffs and for other mining companies, and there’s also an issue that the federal government has important areas of jurisdiction that have to be considered as well.
MM: You’ve met with the different First Nations within the Matawa Tribal Council recently — are they in agreement on all of the issues that will be under discussion?
BR: I think there’s general agreement on some important principles. Obviously, among the chiefs and among the communities, there are different perspectives. You have the different realities of the communities that are already connected by highway, that have better Internet access, that are hooked up to hydro and so on, and there’s the difference between those communities and the communities that are only accessible by air or by winter road, and which are facing some different needs. But there are some important things that people share, important cultural connections. It’s also fair to say that the communities are often inter-related, there are people who have either lived in different communities or whose family comes from different communities, there’s a lot of cultural connections, so that’s an important thing to bear in mind.
MM: Is it necessary to get everyone on the same page before negotiations start?
BR: Well, the more consensus there is, the easier it is to go forward, but we’re all learning every day how this is going to proceed — it’s a bit of a work in progress, it’s not as if there’s a complete model for this, although there h
ave been some important (land-use) planning exercises in other provinces: in Manitoba, in Alberta, there have been quite a lot of efforts that have been made to move things forward. There’s a lot of ways in which Ontario is doing something which other provinces have already begun.
MM: Is revenue sharing going to be on the table — is that something that the Matawa council wants on the table?
BR: Yes and the premier (Kathleen Wynne) has indicated in her letter to us that she’s ready to discuss that.
MM: Given that Cliffs has suspended its work at its Black Thor project and commodities prices have declined, do you think that this weakens your hand in negotiations? Cliffs could easily walk away from the project at this point, and then there might not be any investment in the region. Is that a concern?
BR: I think it’s a mistake to think of the development as belonging just to one company. The fact of the matter is that obviously what happens is affected by conditions in the marketplace, but the other fact is that there’s been a huge mineral find and there are a lot of mining companies in the world and at some point, sooner or later, the ore will be developed. In many respects, it’s important to get the framework right before the development starts to happen rather than after. Having said that, we’re in touch with not only Cliffs, but the other companies that have expressed an interest or have a claim and have indicated they want to be part of dealing with this question. So I don’t think that Cliffs’ decision — they haven’t actually suspended (work), what they’ve done is said that they’re going to cut down on spending decisions until the framework is clarified and the government’s policies are clarified, and I think that’s part of what we want as well — we want to see things clarified too. So I think there’s a common interest in trying to get to some solutions.
MM: They’ve suspended their environmental assessment process, I guess partially because that process is being challenged in court (a decision is expected in the fall).
BR: Yes, that may be a factor, but the other factor is there are powerful market conditions at work and I think obviously that’s something which the company has had to take into account.