TORONTO — The planned development of Northern Ontario’s “Ring of Fire” mineral belt got a potential boost on Wednesday when an appeals court ruled that a small junior mining firm should not have exclusive access to a transportation corridor.
The decision opens the door to construction of a north-south road to the Ring, which is thought to contain about $60 billion of chromite and other minerals. The Ontario government supports a road, in part because it would link up with remote First Nations communities.
What the appeals court is saying is that you can’t hold mineral development hostage
In 2009, a Toronto-based company called KWG Resources Inc. staked more than 200 mining claims going from the Ring of Fire all the way down to the CN rail line in Exton, Ont. Effectively, this gave KWG control over a crucial 340-kilometre access route to the mineral belt.
U.S. mining company Cliffs Natural Resources Inc. was keen to develop a road up to the Ring that would cross more than 100 of KWG’s claims. But its attempts to do so were thwarted.
In 2013, the Ontario Mining and Lands Commissioner rejected Cliffs’ request for an “easement” on KWG’s claims to build a road, saying it could negatively affect the claims.
However, a divisional court overturned that decision in 2014. And on Wednesday, the Court of Appeal for Ontario upheld the divisional court’s ruling. That opens the door for a road.
“What the appeals court is saying is that you can’t hold mineral development hostage, in a sense, by staking up the access routes and holding them,” said Alan Coutts, chief executive of Noront Resources Ltd., which owns vast chromite assets in the Ring of Fire.
The appeals court said it did not accept KWG’s argument that it should have a veto over the claims because it might one day discover minerals on them and a road could interfere with exploration and development. It was no secret that KWG staked these claims in order to access the Ring of Fire, rather than explore for minerals on them.
“There was no evidence that the proposed easement would interfere with (KWG’s) exploration or mining of its claims,” Justice G.R. Strathy wrote.
The court decision was a positive development for Toronto-based Noront, which bought Cliffs’ Ring of Fire assets last year to become the dominant landholder in the region.
Noront is in no rush to develop a north-south road because the company is currently working on an east-west route to access its Eagle’s Nest nickel-copper deposit in the Ring. But once Noront or other mining companies get serious about developing the big chromite deposits in the region, the north-south route will be crucial.
Coutts noted that the Ontario government could go ahead and develop a north-south road now if it wants. Queen’s Park has committed to spending $1 billion on Ring of Fire infrastructure, and has asked the federal government to do the same.
“This does open up possibilities for the provincial government’s infrastructure plans,” he said.