Northern Policy Institute Releases its FIRST COMMENTARY on Ring of Fire – June 17, 2014

An ongoing challenge for Ring of Fire (RoF) mineral development is who will pay for the required infrastructure and how it will be organized, planned, managed and implemented. A properly designed Authority model could be more effective than a traditional Crown Corporation to meet the infrastructure needs. The Authority model would maintain the core elements as formulated in Canadian Airport/Port Authorities, but would need to be tailored to fit the unique challenges of RoF development. An effective model would place the onus and risks on all the stakeholders and not just the provincial government and taxpayers, while maintaining elements of independence, inclusiveness, risk sharing, market-driven, political independence and legislated legally binding powers.

The Ring of Fire consists of an area in Northern Ontario near the Attawapiskat River, where large highgrade deposits of chromite, nickel, copper and other minerals have been discovered, currently valued from $60 to $100 billion dollars that can be mined over many decades. The mineral resources in the area are remote and difficult to access with many conflicting and competing interests and costly infrastructure requirements. Stakeholders include nine First Nation communities in the region, various mining companies and the provincial and federal governments, making infrastructure needs – such as railway, road, power, pipeline and/or air facilities – a complex arrangement.

The Government of Ontario announced that it will create a development corporation that would bring together public and private partners. Under such a Crown Corporation model, while stakeholders would have a major say and make investments, the provincial government would be expected to make the final decisions, approve all Board Members, review and approve plans and all major projects, fund the largest portions of the costs and accept most of the risks. However, issues such as uncertain mineral markets and prices, a growing provincial deficit and debt, as well as unresolved aboriginal demands and environmental assessments, suggest that there is good reason to transfer more of the responsibilities off the shoulders of the provincial government.

Such an option could involve creating a new independent and arm’s length statutory Ring of Fire Infrastructure Authority. All parties would have formal representation on the Board and it, not government, would select its own Chair and senior management. The Authority would be given power to plan and procure all or most of the facilities and services for road, rail, power and air, while sharing costs and risks with the private sector – i.e. the investments from mining companies, railways, and hopefully public private partnerships and access to the normal financial markets. The market place, not governments, would bring the discipline needed in terms of the viability, costs, risks and rates of returns.

Political direction and decisions would be minimized.

Read more: https://ibftoday.ca/wp-content/uploads/2014/06/commentary-1-rof-authority-model.pdf