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Ring Of Fire Project: For First Nations, Disruption Is Certain, Profits Less So

Is This First Nation Ready For A $50-Billion Juggernaut?

Staking Claim is a multi-part series exploring the proposed Ring of Fire mining development in Ontario and how the First Nations communities are preparing for economic activity and the environmental and societal consequences of Canada's next resource rush.

WEBEQUIE FIRST NATION, ONT. — A bald eagle soars from the east between the evergreen branches of an uninhabited island in Ontario’s Far North and swoops in front of a fisherman’s small aluminum boat.

Another eagle flaps nearby as the boat speeds toward fertile fishing grounds. Sightings of the majestic bird on this fly-in First Nation reserve have become more frequent, just as at-risk woodland caribou have started trekking through Webequie’s land.

So have wolves. And last winter, a wolverine — another threatened species — was spotted on the ice road connecting the community on the skinny northern tip of Eastwood Island to the nearest town 250 kilometres southwest.

Some say the eagles, the wolves and the caribou signal that wildlife is fleeing the Ring of Fire, an area of mining development that has been dubbed “Canada’s next oilsands.” The boggy region in the James Bay lowlands is less than 90 kilometres southeast of this reserve, and in one of the world’s last undisturbed forests. It is farther north than most Canadians have ever travelled.

At the moment, the Ring of Fire is little more than a 20-kilometre strip of discoveries surrounded by prospectors’ stakes, drilling equipment and dirt roads in the midst of a marsh.

But the influence of the massive deposit of minerals could soon threaten to swallow this First Nation. Webequie is squarely in the mouth of the Ring of Fire, a 5,000-square-kilometre crescent the size of eight Torontos.

Before mining companies can consider breaking ground, the crucial question of how to transport the valuable cargo out of the remote region must be answered. A highway connecting the Ring of Fire to the Trans-Canada hundreds of kilometres to the south could be the first permanent connection to Webequie and other isolated native communities in Ontario’s far north.

It could be one of the most transformational stretches of highway in Canada’s history.

For resource companies, the route could determine whether projects get off the ground. For the people of Webequie, the stakes are even higher; it could change their entire way of life.

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Reserve Life

Webequie's Path To Development

As some of the most neglected areas of Canada, Webequie and surrounding First Nations in the far north have the most to win and the most to lose along the road to development. The path could lead the community out of poverty, replacing despair with opportunity. But it could also provide greater access to negative influences, such as drugs and alcohol, that already afflict some of its members.

To Webequie members, the lush group of islands, the lakes and rivers that dot the area are a link to those ancestors — a source of food, medicine, reflection and spirituality. They believe it is their responsibility to care for the land and all of its inhabitants.

To resource companies, the land’s value lies underground. Miners eyeing a potential $50 billion in profits must convince the affected First Nations communities that they can be trusted to ensure that everyone — natives, governments and industry — benefits from resource extraction at a minimal cost to the environment.

Guardians of the Land

The allure of the Ring of Fire region is not lost on the people of Webequie. Like prospectors, they value the resources in that swampy swath of land but the influx of mining activity has already affected their way of life.

Trappers, hunters, fishers and gatherers from the reserve began reporting helicopters whirring across the sky and prospectors staking claims to riches on their land about a decade ago.

“All of a sudden, these people who were going out on the land see these markings,” says Webequie band councillor Elsie MacDonald, a soft-spoken former chief with a pragmatic mind and warm embrace for a stranger.

“And that’s when they come back and say, ‘who is this on our traditional territory? What are they doing, and what’s their purpose’?”

It was that tract of land to the east where they gathered with neighbouring bands for centuries before it was nicknamed the Ring of Fire by miners.

“There’s a really great blueberry patch out there. People used to fill up their buckets with them,” MacDonald says, though her uncle’s visit there three years ago is the last time she recalls someone travelling to the area for berry picking.

Webequie First Nation people have lived off this land for hundreds of years, since the small island was nothing more than a meeting place for families living nomadically in the surrounding bush, following wild game and migration routes. Elders trace the first permanent settlements back to the 1800s, and oral history of their presence dates to a century earlier.

Given the community’s reliance on the forest, they are wary about development. Potential effects include a loss of local species, contamination of land and water from spills or seepage and the degradation of peatlands that act as a carbon sink. Even if environmental damage can be contained, the influx of human activities in the area could deter wildlife from following their natural migration routes.

Today, there are few signs of resource development on the 343-square kilometre reserve — an empty shed once rented by a mining company and stacks of abandoned barrels of oil near the small airport. But the community is bracing for upheaval.

“With change comes good and bad,” MacDonald says.

In the conference room of the Webequie band office, maps of mining activity in the Far North are taped to the walls in an attempt to understand the complex web of claims on their traditional territory.

MacDonald has converted a whiteboard mess of overlapping circles and scribbles into Excel spreadsheets and PowerPoint presentations to try to organize the situation.

As the councillor responsible for the band’s finances and strategic planning, the pressure to strike a balance between environmental stewardship and business development weighs on her overworked shoulders.

Sometimes it overwhelms her. The desk in her office is crowded with boxes of maps, proposals, applications and even a box of moccasins. Her bedroom, which barely fits a bed and small table, doubles as her home office, where to-do lists, Post-it notes and maps fight for space on the wood-panelled walls adorned with inspirational plaques and religious art.

Elsie MacDonald has lived everywhere from Thunder Bay to Cape Breton Island, but moved back to her community in 1991 after a brief stint as an administrative assistant for the Ministry of Natural Resources left her feeling like a “traitor.”

“At that time natives were being charged for hunting and I thought that was wrong,” MacDonald says. “I felt that under the treaty they have inherent aboriginal and treaty rights to go ahead and hunt anyplace that they need to find food.”

That commitment to her people’s rights brought her back to Webequie. Now she is devoted to ensuring her people have a voice.

“The people are considered guardians of the land, and as custodians, they have a say,” MacDonald says.

“They want the industry to understand they have to deal with First Nations first before they can go ahead.”

Proceed With Caution

Aboriginals increasingly hold the balance of power in high-stakes development opportunities — their support is key to ensure smooth operation of multimillion-dollar projects. The alternative is simply too costly.

Nearly 500 aboriginal communities across the country are at the heart of some $300 billion in oil, gas, forestry, energy and mining projects waiting to be developed.

After centuries of being ignored and alienated by governments and corporate Canada, natives have been on a judicial winning streak. A broad interpretation of rights outlined in Section 35 of the Constitution makes it clear that First Nations must be consulted on resource development occurring within not just reserves, but also on traditional territory, though they hold no official veto power.

The history of resource development in Canada, from the Mackenzie Valley Pipeline to the Prosperity Mine, is littered with projects shelved by companies that didn’t properly consult First Nations — resulting in big hits to their bottom lines and to the economy. Today, developers need only look west to the troubles Enbridge is facing over its controversial Northern Gateway pipeline for an example of what to avoid.

First Nations have been shut out of the benefits of development, which has kept them locked in dependence on the federal government, says Grand Chief Edward John, a member and former chair of the UN Permanent Forum on Indigenous Issues.

“The greatest source of poverty for First Nations has been their inability to access and develop lands and resources within their traditional lands and territories,” he says.

“Someone else makes the decision, someone else benefits.”

Not now, he says. First Nations want a stake in such projects and the ability to develop their own.

“We need to develop a sense of independence like our ancestors had. We took care of ourselves and the lands and resources within our territories, and, surely to goodness, we can do that now.”

A growing number of First Nations communities have already taken steps to build their economies through agreements that go beyond the promise of jobs and a share of revenues.

The Onion Lake First Nation straddling the Alberta-Saskatchewan border is working to turn the oil sector’s interest in their land into a diversified economy, in part through a number of joint ventures with oil-industry partners, and increasingly through self-owned businesses such as trucking, pipeline, and building material operations. Revenue is used to invest in the community and foster self-sufficiency.

A Crossroads

On Webequie’s small territory, children play amid neatly piled stacks of firewood in the shared spaces outside government-funded homes in various states of disrepair.

Community members still hunt, skin and tan their own animal hides, make moccasins and jewelry and smoke fish and meat to keep for the winter months. Many mothers carry their infants on the traditional tikinagan, wrapped tight against a wooden plank.

During festivals, they cook communal meals — frying fish together over an open outdoor grill, handing out portions as they are ready.

With Webequie’s median income of $10,656, many families still rely on trapping, hunting and fishing to supplement what little they can afford to buy at the community’s lone northern store, which provides food and other necessities flown in to be sold at a price three times as much as in Thunder Bay. A litre of gas costs $2.69, while two litres of orange juice sell for $11.59.

A potential all-weather road would permanently connect Webequie to the outside world, reducing the high costs of goods. It would enable the removal of junk vehicles from a heap beside the dump. Access could mean more supplies to improve beaten up and bumpy dirt roads and to fix the nearly 60 per cent of houses that are in need of major repair. It could also bring an influx of visitors looking for ways to spend their money.

An infrastructure proposal from Ontario Power Authority would see a power line from the Ontario grid extended to Webequie, which could end their reliance on emissions-heavy diesel generators that can cut out in cold weather.

However, a permanent connection to the mainland could also lower the prices of drugs and alcohol and make them readily available on a reserve that is officially dry. Someone looking for a fix can illegally get a quarter of a pill of Oxycontin for $120 or a 375ml bottle of vodka for $150.

With unemployment hovering about 70 per cent, many on this reserve of 840 believe the Ring of Fire represents the first opportunity to stimulate the local economy they have ever seen. They want jobs, and companies say they want to hire locally.

But Elsie MacDonald and her fellow band councillors want more than jobs.They are contemplating plans to open the airport to commercial use, warehouses for core samples, a camp for miners, a restaurant, as well as to expand the six-room motel. Joint ventures to supply resource companies in the Ring of Fire are also top-of-mind potential business opportunities.

While MacDonald keeps one eye focused on the internal needs of her community, she also keenly watches the international metals market, looking for signs pointing toward a resurgence of interest in the region.

The Legend of the Ring

The Ring of Fire — and its store of chromite, nickel, copper, zinc and gold — comprises a new mining district at a time when a discovery is a rarity. Companies are eager to begin construction.

The resource rush in the area started in 2002 when prospectors, exploring the area for diamonds since the 1990s, instead found deposits of copper and nickel, sparking a flurry of other exploration activity.

Junior miner Noront Resources Ltd. discovered a rich deposit of minerals in the James Bay lowlands in 2007. Founder and former president Richard Nemis, a Johnny Cash fanatic, named the area the “Ring of Fire” after the famous country ballad.

Then Noront prospectors struck paydirt in chromite, the ore of chromium that, when processed with iron into ferrochrome, is used in chrome rims for cars and stainless steel sinks.

It was the first time commercial-level quantities of the glittery black mineral found in meteorites were discovered anywhere in North America. Some suggest the Ring of Fire was created by a meteorite that left chromite and brought an unusual amount of metals closer to the Earth’s surface.

When global financial markets crashed in 2008 the exploration rush withered, though demand for chromite and the other minerals is expected to increase as global markets recover.

Now there are about 30,000 claims and 30 resource companies in the area. Two companies have proposed projects: Noront, with its $609 million Eagle’s Nest nickel, copper and platinum underground mine and Cliffs Natural Resources, with its $3.3 billion Black Thor open-pit chromite mine. Both are within 100 kilometres of Webequie.

“This isn’t a project, this is opening up a new mining district,” Bill Boor, Cliffs senior vice-president of global ferroalloys, says of the scale of its Black Thor site, the largest proposed development in the area.

“I can’t think of any [regions] in particular worldwide that are untouched at this point or untapped that have the potential that the Ring of Fire does.”

Road to Nowhere

Ambitious projects require huge investments. The area is not accessible by road year-round. Supplies are flown in or driven across ice roads during long, frigid winters. The frozen lakes, acidic soil, impermeable muskeg and lack of rock and outcrop make construction — both at the mine sites and for surrounding infrastructure — particularly challenging. The issue of building a transportation corridor to get metals to market could make or break the mining development.

Cleveland-based Cliffs has proposed a 350-kilometre North-South corridor. The estimated $600-million new highway would see 100 truckloads per day cross four rivers and a woodland caribou migration path.

Although the plan does not connect any of the remote Matawa First Nations, Cliffs says the corridor would be a “spine” giving the First Nations it nears a chance to build roads out to it.

The question of where a road is built is so crucial to Cliffs that it has threatened to abandon its project after a September ruling denied it the right to build a road on land held by a rival miner. Cliffs is now weighing whether to appeal the decision, buy the smaller miner outright or walk away altogether.

While Cliffs’ future in the Ring of Fire is uncertain, Noront is going all in. Headquartered in Toronto, Noront’s sole focus as a company is the Ring of Fire. It is forging ahead with its environmental assessment and expects to submit it by the end of the year.

Noront is proposing an alternate transportation option — a $500 million East-West corridor. The company argues that the route is superior in many ways; it does not traverse the migration route of woodland caribou, would be less expensive to build, avoids rivers and provincial park and would connect four remote communities.

Noront — whose Toronto office is decorated with aboriginal art and vests made by children of Webequie that it bought from a charity auction — has already sunk $200 million into projects in the region, more than $5 million of it on consultations, training and social programs in First Nations communities. Paul Parisotto is the chair of Noront’s board and says the First Nations near the Ring of Fire will reap rewards from the project.

“They make money, we make money, they have jobs, they feel good about themselves, so it’s a win-win for everybody, and that’s what we’re trying to achieve,” said Parisotto, who served as interim CEO until recently.

The relationship between the mining company and the communities has been contentious. Webequie and Marten Falls First Nations allege that Noront began using two frozen lakes in the area as airstrips without their consent when it first started staking the area for claims in 2003.

In 2010, frustration over the lack of consultation and the impact of exploration and construction activity hit a boiling point. The two communities erected blockades to stop mining planes from landing. Community members of all ages holding hand-painted placards gathered on the airstrips.

”No passing without our consent,” read one sign.

“What’s in it for us?” asked another.

Work was interrupted for two months before the First Nations were convinced their grievances would be taken seriously. Exploration agreements, which covered accommodation and compensation, were signed within months.

But the agreement between Noront and Webequie expired last year, and the two have not been able to agree on new terms. The First Nation wants money from the mining company in order to study the impact of a road and future mining on their land.

Noront says Webequie is asking for more than it is willing to provide before it even has approval for the project.

For Webequie, it is a veritable Catch-22. Without an agreement providing financial support, it cannot pay for the studies, research, advisors, travel and translations needed to educate its members, form an opinion and articulate a position on the terms of a mining agreement.

As the preliminary stages drag on, miners are growing increasingly frustrated with the glacial pace of development. They fret that investors and the global marketplace could lose interest.

Bill Boor of Cliffs acknowledges that his company’s initial timetable for an operational mine by 2015 assumed people were “politically and emotionally and intellectually ready to move” and that reaching the point where parties were co-operating has taken a lot longer than anticipated.

“We’ve got so many autonomous communities that are touched by this project, and it creates a complexity that is unusual in my view,” Boor says.

While communities insist on negotiating with mining companies one-on-one, they have banded together for talks on regional strategy with the province. The group of First Nations will be represented at the bargaining table by former MP Bob Rae and retired Supreme Court Justice Frank Iacobucci will negotiate for the province.

But if the various negotiations do not begin to move faster, Boor says, the company could reach a point where the project is no longer economically feasible. That, he says, would reflect poorly on Ontario and Canada’s mining sector.

“If projects like this don’t happen because we can’t get the alignment, then it says they’re not open for business.”

Buying Time

The Webequie First Nation sees the delays as a blessing. They give the band, economically trapped in the 19th century, time to prepare to sit at the table with well-staffed governments and multinational resource companies.

Even the federal government has expressed concerns about whether Webequie and surrounding First Nations are too underdeveloped to benefit from such projects.

“The First Nations closest to the Ring of Fire are among the most socio-economically challenged in Ontario, impacting their ability to meaningfully participate in large complex projects,” according to February 2013 briefing notes prepared for John Duncan, then minister of Aboriginal Affairs and Northern Development Canada.

“Exposure to a development of this magnitude combined with low educational attainment and other factors suggests that the communities do not currently have the capacity to address the various issues related to the Ring of Fire.”

Before Webequie considers whether it is for or against a permanent road connection, it must improve existing shabby infrastructure, MacDonald says. The reserve needs some $28 million to bring its roads, housing, garbage disposal, water and sewage treatment facilities up to the Canadian standard, according to a study conducted for the band last year.

The people of Webequie want development to help end the challenges associated with isolation in the wilderness and to raise a more hopeful generation that thrives on both modern and traditional knowledge, that understands both Oji-Cree and the technical jargon of mining companies.

They want to end their 70 per cent unemployment rate, increase the percentage of the population with a high school degree from 30 per cent and address the problems that contribute to a suicide rate that is 10 times the national average.

As another winter approaches, Webequie members are bracing for the latest evidence of the impact of activity in the Ring of Fire — another stream of wildlife across their ice roads.

But even as the outside world bears down on the community, Webequie vows it won’t bend to pressure to build a relationship with miners on a schedule dictated by the companies.

“When the community is in a position to deal with what happens to their land and resources, then that good relationship would start to happen,” MacDonald says.

“But the community has to be totally ready.”

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